Gold System in Development

Welcome and enjoy

I wished I had more days to back test but I just have Thursday and Friday. Starting Monday, the forward testing continues.

Don't be put off by the Forex currencies that will be illustrated here. This is very much a Gold specific system.

The idea is simple, we wait for any currency reading between 03:00-06:00 so that we can determine the primary direction for the remainder of the day for all XAU crosses.

For example on Thursday, the 03:00-06:00 reading was USD at 03:28.

So we pull up the XAUUSD chart and mark 03:28 with a vertical bar (and optionally a horizontal bar at the close of the 03:28 candle), and mark the local support resistance levels.

Then, whichever side price touches first after the 03:28 vertical line, the opposite direction of that will be the trade direction. Here, after the 03:28 vertical line, price touched the resistance, so we can determine the direction to be bearish.

Trades can be entered with pending sell limit order at the resistance level itself, or pending stop order at the horizontal line at the candle close of the vertical line (after price has touched the resistance level first), or trades can be entered at any location in the region above resistance.

Stop loss should only be placed after price has touched the other side, the support level.

Take profit depends on your current methods. I personally like fixed equity closes.

This really isn't about where to put your SL or TP. This is about determining the direction of Gold. Everyone that decides to follow this thread should already have their own methods of entries, SL, TP, etc. No newbie traders please, asking where to put stop loss, etc. If you need someone to tell you how to manage your risk, then you shouldn't be participating in this thread. This thread is about determining the direction of Gold.

That was Thursday, next let's look at Friday.

For Friday, there was a CHF reading at 05:29.

It's fine if your broker doesn't have XAUCHF chart, the XAUUSD chart should be sufficient for any currency reading but if your broker has XAUCHF, then pull up XAUCHF since CHF is the currency reading.

Here, price touched the support level after the 05:29 vertical line so the direction can be determined to be bullish.

So, they were the Thursday and Friday examples.

To summarize, we're looking for currency readings between 03:00 and 06:00, which is early enough to play out intraday by London/New York. Once direction has been determined, all Gold crosses could be traded simultaneously.

I'll continue forward testing this Gold direction method starting Monday.

Test this method on a demo account only.

What is it for Monday?

Hi,


Thanks for sharing this approach! The logic behind determining the daily bias and trading the liquidity touch is very clear.
However, I have a quick question regarding the currency readings: Could you clarify how you identify those specific currency readings (e.g., USD at 03:28 or CHF at 05:29)?

We won't know Monday's reading until Monday. The currency strength indicator starts analyzing at 03:00 Tokyo open so there should be a currency reading sometime after 03:00. The one I'm paying attention to for Gold is the very first currency reading. The earliest one. That's the one I plan to use to determine Gold's direction pre-London/New York.

Welcome. It's v3.0 of the currency strength indicator which I designed for Gold, but Thursday's AUDUSD example showed it could be used for Forex as well. It needs testing to be sure, but I think if there is a currency reading strong/weak, and if the second currency reading is weak/strong, then it could be used for Forex as well. In the case of Thursday, USD was strong, followed by AUD weak, so this type of combination could be used for Forex, but it needs to be forward tested to be sure.