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XAUUSD – GOLD 4H Timeframe Technical Analysis

Starting off on the Daily time frame to understand the overall trend, you can see that price has recently made a new high around $1550 zone and now have started to Flag or consolidating close its ema’s.

At the beginning of October we saw Daily price testing its 50 EMA and bouncing off that support level. Adding further confluence to our Bullish Bias


On 4H timeframe you see that price has been consolidating and finding resistance around $1510 price zone. Also supporting this price action are all of the key EMA’s curling up rite below the current price action.


We will be looking for a break above the $1510 price zone to enter a Long trade on Gold

How much money can you make in Forex Trading

Similar to when you apply to any other job, when you decide to generate an income via forex trading , asking or knowing how much money you can make is a very valid question.

Most new traders tend to focus on how much money can be made on a  per trade or  month basis. This mainly stems from watching different traders on social media flashing their winning trades. But what’s unknown is their actual capital and some time whether they are actually trading a REAL account. But that’s a different topic for another time. 


What you need to be focusing on is the percentage you can gain relatively to your account balance.    Let’s first discuss why you need to focus on percentage returns.

The amount of money you can make per trade is always relative to the total trading capital. Why? 
Because as disciplined  traders we only risk  X% of our capital on each trade. The percentage you are willing to risk per trade is truly a personal decision, but keep in mind that no one trade should put you account capital or account balance at risk. That said a good risk per trade should be around 1% – 5% per trade. 



That being said you will understand that a new trader with $5000 account balance and a veteran trader with a $100,000 account balance has huge difference in how much money they will risk per trade. 
A new trader with $5000 account balance would risk $50 per trade A veteran trader with $100,000 account balance would risk $1000 per trade. 
If both these traders achieve a 2:1 risk to reward on this trade, the new trader would walk out with a $100 profit and the veteran trader would walk out with $2000 profit. 
I hope this explain why you should not be focusing on the dollar amount gains but rather focus on the percentage of your capital you can gains.  Also please note that you should not be focusing on gains and losses for each and very trader. As a trader you should understand that trading is a probability game and learnt to except loosing trader.  You should be focusing on weekly and monthly percentage gains. 


To summarize what I mentioned above, 

  • Understand that measure your self by percentage gains relatively to trading capital.
  • When you trade always risk no more than 1%-2% of your trading capital
  • Don’t expect to win all of the traders
  • Measure goals weekly or monthly

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GBPCAD Technical Analysis

As shown in the chart below, daily price action broke above the resistance level at $1.64 to print a higher high around $1.66 zone. Following this higher high, price has now pulled back to find support at uptrend line and the EMA’s. Forming a breakout and a pullback to its previous support structure.

On the 4H timeframe following the retest of the uptrend line, price has broke above all of the key EMA’s and now pullback to retest them and also the price support 1.64.  Price has also printed a Bullish candle with a lower wick signalling the build up of Bullish pressure.  A break and close above the 4H bullish low test candle would confirm further Bullish bias for this Forex pair. 

How I came up with my first Forex Trading Strategy

You don’t necessarily need full blown strategy to start back testing. Because no strategy goes into my real money account before a solid multi year backtest. This is what I did. I hope this will help you come up with a new strategy or tweak your exciting trading strategy.

When you start to work on your Forex trading strategy :

  • Decide if you would like to come up with one of the following ( if you are new, stick one of these until you have mastered this)
    1. Trend Continuation
    2. Trend Reversal

I would advise newbies to start with Trend continuation since Reversal are bit more complicated and you need to take a lot of things into consideration.

I picked trend continuation. From here it’s an open playing field. But keep in mind that we are still building a strategy. I’m a technical trader who uses candlestick signals, trend line, EMA’s and Support & Resisntace levels to alert me on a possible setup. That said, for now you are going to focus on two candlestick signals.

Let keep it simple and focus on Engulfing candles and Hammer Candles(aka Low/High test candlesticks)

Now that you know what type of candles sticks you will be focusing on, let’s get deeper into the strategy building part.

I will be discussing a LONG(Bullish) strategy but reverse this if you want to build a SHORT(Bearish) strategy .

In order for price to confirm that we have a bullish trend we need to see price making at higher highs and higher lows

Using a web application such as Tradingview you will go back in time on a Forex pair to point where the price has a Higher Low and a Higher High.

At this point once price has formed a higher high, we analysis how price hs acted. Most of the time following a higher high price would pull back to a key level.

This level could be a previous resistance point, now turn into the support level or a key Moving Average. This is where you need to be creating and start adding and removing Moving average(MA). In my opinion keep it simple and stick to 2 -3 MA’s.

For an example let say once the price formed a Higher high price pull back to a 20 MA and a support level and printed Hammer candle stick signal. In your next step you want to go back in time may be 3 -5 years check to see how price acted every time your criteria was present.

NOW THE BACK TESTING STARTS.

You want to document every win and loss to understand the W/L Ratio. You can even add an indicator such as MACD, Stoch and RSI as an added level of confirmation.

All in all keep the indicator to a minimal and

NEVER GET INTO A TRADE BECAUSE YOUR INDICATORS LINED UP. PRICE IS KING.

GOLD (XAUUSD) setting up for a another push up

Daily price action has made a higher high at $1.557 and now has pulled back to its previous structure level at $1.500.

$ 1.500 price zone has provided multiple support levels arising from Price Support & EMA support.  One thing watch out is if this pull back start to form a Bearish Flag.  Ideally I would be looking for a Intra day 4Hour pattern as my entry trigger. Also supporting our Bullish bias is last week’s close, which closed as a Green candle with barely any wicks.

Daily Timeframe
4hour Timeframe

From a 4H timeframe, price has been able to close above all 4H moving averages and all three are nicely hugging each other , which brings added strength if this were to shoot upward.

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