WillssFXLearn how to personally trade gold or any pair with this strategy based on liquidity and statistics, catching sniper entries and tight stop losses.
How to Trade Gold Using Liquidity-Based Strategy
As a trader, you know how volatile the markets can be, especially when there is a significant event happening somewhere in the world. The recent war in Russia has made trading even more challenging. However, experienced traders know that challenges also present opportunities, and gold is one of the best pairs to trade during these times. In this article, we will outline a liquidity-based strategy that you can use to trade gold, or any other forex pair, effectively.
The Majority of Traders Don’t Make Money
The first thing you need to understand is that the majority of traders don’t make money. Studies say that 98% of traders lose money, which is a staggering figure. Therefore, If you were a losing trader before, you need to think about what you would have done in the current market situation, and then do the opposite. This strategy works because the market is based on liquidity, and if the majority of traders are losing, it means they are providing liquidity to the winning traders.
Using Liquidity-Based Strategy to Enter Sniper Positions
The key to this strategy is to enter sniper positions, allowing you to get in and out of the market quickly. When you enter tight stop losses, you don’t need to target massive moves because a smaller target will give you the same risk-to-reward ratio. You can take advantage of market volatility by setting a 10 pip stop and a 30 pip target, which can be easily achieved in just a few hours.
Gold is a Robust Pair to Trade
Gold is one of the most robust pairs to trade because it is always in demand, and it has high liquidity. During times of uncertainty, traders rush to gold because it is considered a safe-haven asset. Therefore, entering gold trades may be particularly lucrative during a war, recession, or other uncertain times. Moreover, as a trader, you should always be ready to adapt to market changes, and gold offers the flexibility that you need to do so.
Entering the Opposite Way to Expected Levels
A lot of traders use support and resistance levels to enter trades. However, in liquidity-based strategy, you enter the opposite way to the expected levels. For instance, let’s say that you see wicks indicating resistance. Instead of entering a buy position, you should be ready to enter a short position once the price goes above that level. Once the price breaks above and enters a significant area, this is where you should be ready to enter your positions.
Using Confluences to Get Pinpoint Entry
Using confluences is one of the most effective ways to get a pinpoint entry. You can combine price action with other technical indicators to identify buying and selling opportunities that fit multiple criteria. For example, you can combine a psychological level, supply and demand levels, and a trend line to identify a pinpoint entry-point. By doing this, you will have multiple confirming signals and are more likely to enter a winning position.
Conclusion
In trading, there is no perfect strategy that works all the time. It is essential to be flexible and adapt to market changes. However, with liquidity-based strategy, you can increase your chances of success significantly. By entering sniper positions with tight stop losses, you can take advantage of market volatility and enter the opposite way to the expected levels. Doing this with confluences can give you a pinpoint entry, increasing your chances of closing a profitable trade. Therefore, whether you want to trade gold, the GBP/USD, or any other forex pair, using a liquidity-based strategy can help you maximize your profits.
