Gold is an excellent trading instrument. It offers high volatility and some of the lowest futures commissions. Gold trading is not limited to long-term trend-following strategies. Scalping strategies are also excellent for gold.
Take two moving averages and build a channel. We’re interested not only in the channel itself, but also in the direction of the moving averages. You can, of course, create such a channel from any indicators you have; I’ll provide the parameters at the end of the article. But I recommend skipping the hassle and using this free indicator .
The essence of the system: XAUUSD M1. To enter a scalping trade, we need a one-minute bar that touches the lower boundary of the channel and closes above the upper boundary. During this time, the moving averages forming the channel should be pointing upward. We will enter the trade after breaking the high of this bar. In the image, I’ve marked the entry point with a white line. The system is very clever. Explore the chart yourself, and you’ll see how these simple conditions filter out most losing trades.
We’ll take profit at a distance of 2-3 channel widths. A trailing stop can be used. Don’t hold the position if the price breaks the low of the bar that generated the entry signal!
Here’s a sell example. I’d like to point out that this is during the strong uptrend we’re currently seeing.
Indicator parameters
Two moving averages are a simple yet powerful tool for determining exit points. The key to success is their correct combination and adherence to risk management rules. This MQL5 indicator simplifies the process by sending signals in real time. Always backtest your strategy before using it.
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