Petko AleksandrovIn times of recession, investors face tough times on the markets, but gold performs well while everything else crashes. Follow a few simple rules and you can be profitable on both sides. The best TradingView strategy for gold involves looking at the big trend, important support, and resistance levels and trendlines, and three Moving Averages, before making trades on M15 for spot spots to Take Profit, and ignoring the risk reward ratio for a realistic approach.
Trading Gold: A Winning Strategy for Any Market Environment
Introduction:
During times of recession and market turmoil, traditional investment vehicles can struggle to maintain value. Central banks raise interest rates to fight inflation, creating uncertainty on the markets. However, there is one asset that historically performs well in these conditions: gold. In this article, we’ll share a winning TradingView strategy for gold that you can use to profit in any market environment.
The Long-Term Trend:
To start, it’s crucial to make sure you’re trading with the long-term trend. Using the Dow Theory, we can identify whether we’re in an uptrend by looking for a series of higher highs and higher lows. For gold, we’ve already seen this trend emerge over the past year, with the price forming new higher highs and higher lows on a daily chart, even as other assets struggle.
Setting Up Your Chart:
When setting up your chart, it’s important to keep things simple. Identify the most important support and resistance levels, along with trendlines, and stick with those. For gold, we only need one support level and one trendline.
Three Moving Averages:
In addition to support levels and trendlines, we can also use three moving averages to help guide our trades. On both the daily and M15 charts, we follow the 20, 100, and 200 moving averages.
Identifying Entry and Exit Points:
Now that we’ve established the long-term trend and set up our chart with key levels and moving averages, we can begin to identify entry and exit points.
Triple Bottom and Resistance Level:
When gold was in a bearish trend for months, we waited for a triple bottom to form, with buyers preventing the price from dropping below $1600. After several attempts to break through, the price finally broke aggressively through the resistance level of $1680. This was an important level to watch, as it had previously been both support and resistance. After a day of consolidation and another push higher, we bought gold with a stop loss below the three bottoms at $1728.
Take Profit and Risk-Reward Ratio:
When entering a trade, it’s important to have a realistic take profit in mind. We placed ours just below the recent highs at $1795. However, the price initially failed to reach this point and eventually dropped below the moving averages. We took profits at $1772, with a risk-reward ratio of 1.54.
Re-Entering the Trade:
After the price went below the moving averages, we had the chance to re-enter once it broke above the counter trendline. While the 20-moving average was still below the 100 and 200, we entered the trade again at the opening of the next bar. This time, our stop loss was tighter, just below $1725. Our realistic take profit was set at $1855, giving us a risk-reward ratio of 6.0.
Ignore Risk-Reward Ratio:
It’s important to ignore rules that suggest risk-reward ratios should be a certain number, such as 1 to 3 or 3 to 1. Instead, focus on keeping your stop loss at a safe place and having a realistic take profit. Sometimes, risk-reward ratios will be below 1, but that’s okay as long as you’re trading a quantity that allows you to keep your stop loss at a safe place.
Conclusion:
Following this TradingView strategy for gold can help you find success in any market environment. Stick to the long-term trend, keep your chart simple, and identify key support and resistance levels. Use three moving averages to guide your trades and keep your stop loss at a safe place while having a realistic take profit in mind. By following these guidelines, you can profit in both bullish and bearish markets.
