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I Made $10,000 Monthly With Position & Range Trading Strategy

  1. Position trading

is a strategy in which traders hold their position over an extended time period—anywhere from a couple of weeks to a couple of years. As a long-term trading strategy, this approach requires traders to take a macro view of the market and sustain smaller market fluctuations that counter their position.

Tools Used

Position traders typically use a trend-following strategy. They rely on analytical data (typically slow moving averages) to identify trending markets and determine ideal entry and exit points therein. They also conduct a fundamental analysis to identify micro- and macroeconomic conditions that may influence the market and value of the asset in question.

Pros and Cons

The success or failure of position trading hinges on the trader’s understanding of the market in question and their ability to manage risk. To lock in profits at regular intervals (and thereby mitigate potential losses), some position traders choose to use a target trading strategy.

 

2. Range Trading

Range trading is based on the concept of support and resistance. On a price action graph, support and resistance levels can be identified as the highest and lowest point that price reaches before reversing in the opposite direction. Together, these support and resistance levels create a bracketed trading range.

In a trending market, price will continue to break previous resistance levels (forming higher highs in an uptrend, or lower lows in a downtrend), creating a stair-like support and resistance pattern. In a ranging market, however, price moves in a sideways pattern and remains bracketed between established support and resistance thresholds.

When price reaches the overbought (resistance) level, traders anticipate a reversal in the opposite direction and sell. Similarly, when price approaches the oversold (support) level, it’s considered a buy signal. Finally, if price breaks through this established range, it may be a sign that a new trend is about to take shape. Range traders are less interested in anticipating breakouts (which typically occur in trending markets) and more interested in markets that oscillate between support and resistance levels without trending in one direction for an extended period.

Tools Used

Range traders use support and resistance levels to determine when to enter and exit trades and what positions to take. To do so, they’ll often use banded momentum indicators such as the stochastic oscillator and RSI to identify overbought and oversold conditions.

Pros and Cons

Trading the dips and surges of ranging markets can be a consistent and rewarding strategy. Because traders are looking to capitalize on the current trend rather than predicting it, there is also less inherent risk. That said, timing is exceptionally important. Oftentimes, an asset will remain overbought or oversold for an extended period before reversing to the opposite side. To shoulder less risk, traders should wait to enter into a new position until the price reversal can be confirmed.

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6 Tips For Supply and Deman Trading

Wyckoff’s “accumulation and distribution” theory describes how trends are created. Before a trend starts, price stays in an “accumulation” zone until the “big players” have accumulated their positions and then drive price higher. They can’t just swamp the market with their full orders because it would lead to an immediate rally and they weren’t able to get a complete fill, thus reducing their profits.

It is reasonably safe to assume that after price leaves an accumulation zone, not all buyers got a fill and open interest still exists at that level. Supply and demand Forex traders can use this knowledge to identify high probability price reaction zones. Here are the six components of a good supply zone:

1) MODERATE VOLATILITY

A supply zone typically shows narrow price behavior. Lots of candle wicks and strong back and forth often cancel a supply zone for future trades.

The narrower a supply/demand zone before a strong breakout is, the better the chances for a good reaction the next time typically.

2) TIMELY EXIT

You don’t want to see price spending too much time at a supply zone. Although position accumulation does take some time, long ranges usually don’t show institutional buying. Good supply zones are somewhat narrow and do not hold too long. A shorter accumulation zone works better for finding re-entries during pullbacks that are aimed at picking up open interest.

Good supply zones are somewhat narrow and do not hold too long. A shorter accumulation zone works better for finding re-entries during pullbacks that are aimed at picking up open interest.

3) THE “SPRING”

The “Spring” pattern is a term coined by Wyckoff and it describes a price movement into the opposite direction of the following breakout. The spring looks like a false breakout after the fact, but when it happens it traps traders into taking trades into the wrong direction (read more: Bull and bear traps). Institutional traders use the spring to load up on buy orders and then drive the price higher.

4) STRONG FORCE LEAVING THE ZONE

This point is important. At one point, price leaves the supply zone and starts trending. A strong imbalance between buyers and sellers leads to strong and explosive price movements. As a rule of thumb, remember that the stronger the breakout, the better the demand zone and the more open interest will usually still exist – especially when the time spent at the accumulation was relatively short.

When price goes from selling off to a strong bullish trend, there had to be a significant amount of buy interest entering the market, absorbing all sell orders AND then driving price higher – and vice versa. Always look for extremely strong turning points; they are often high-probability price levels.

5) FRESHNESS

If you trade of supply areas, always make sure the zone is still “fresh” which means that after the initial creation of the zone, price has not come back to it yet. Each time price revisits a supply zone, more and more previously unfilled orders are filled and the level is weakened continuously. This is also true for support and resistance trading where levels get weaker with each following bounce.

6) AMATEUR SQUEEZE

The Rally-Range-Drop scenario describes a market top (or swing high), followed by a sell-off. The market top signals a level where the sell interest got so great that it immediately absorbed all buy interest and even pushed price lower.

The amateur squeeze allows good and patient traders to exploit the misunderstanding of how market behavior of consistently losing traders. It is reasonably safe to assume that above a strong market top and below a market bottom, you’ll still find big clusters of orders; traders who specialize in fake breakouts know this phenomenon well.

Best Strategy To make $4000 monthly on XAUUSD

1. Scalping. It is rarely used to trade gold. In a few minutes, the price does not have enough time to gain a sufficient move to compensate for the spread and yield a profit comparable to the time spent. There are more profitable scalping trading instruments.

Forex scalping involves trading currencies with only a brief holding time, and executing multiple trades each day. Forex scalpers keep risk small in an attempt to capture small price movements for a profit. The small price movements can become significant amounts of money with leverage and large position sizes.
2. Swing trading. Trading on corrections is also really applied to XAUUSD, as the corrections are not deep. Here, trend following strategies are more suitable. However, you can combine swing trading and trend strategies in some cases.
Swing trading refers to a trading style that attempts to exploit short- to medium-term price movements in a security using favorable risk/reward metrics. Swing traders primarily rely on technical analysis to determine suitable entry and exit points, but they may also use fundamental analysis as an added filter.
3. Intraday trading. Gold day trading is one of the most common strategy types. Unlike currency pairs, which can many times jump up and down during a day, the gold industry slowly gains speed. However, gold features longer price fluctuations during a day at the moments of fundamental factors’ influence. Differently put, the range of the gold price intraday movements is greater than the currency pairs’ movements. The frequency of the XAUUSD price moves is lower.
What is meant by intraday trading?
Intraday trading – also known as day trading – refers to the purchasing and selling of stocks on the same day. The stock market is subject to fluctuations that leads to variation in stock prices throughout the day.

4. Medium- and long-term strategies. Positions can be held open for several days if there is a clear trend. But the profits of these strategies are diminished by swaps and exchange commission fees.

5. Technical Indicators strategies. They are trading strategies based on technical analysis. A combination of volatility and trend indicators with multiple timeframes analysis works well here. In an hourly timeframe, the length of the price movement in the intraday range is estimated. If the price is at the beginning of the movement and the trend is clear, you can open a position. You can also add oscillators as auxiliary tools

6. Price Action strategies. They mean trading based on chart patterns and graphic analysis. Since the movement of gold prices is smoother, compared with foreign exchange assets, resistance and support levels are more clearly traced in the chart. Trend exhaustion patterns are a triangle, flag, pennant, etc. Price action patterns trading can be combined with indicator strategies.

7. Trading based on fundamental analysis. The XAUUSD pair is responsive to fundamental market forces. Trading based on fundamentals suggests you find positively or negatively correlated assets. For example, optimism in the stock market means that investors will withdraw the money from gold assets and reinvest into more profitable assets. Negative GDP forecasts, inflation rise, for instance, push the gold price up. You can refer to the Market Sentiment indicator, showing the forecast of the majority.

8. Social trading. Active trading is not only constantly monitoring the price chart and looking for a signal. You can copy trading behavior and signals offered by experienced traders for a small commission fee. In terms of gold trading, you need to choose traders, who enter trades on the XAUUSD more often than other assets. You link your account to the trading account of such traders and signals are automatically copied to your account.

 

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