eXcentral - Steps to trading Gold
good evening my fellow traders my name is michalis if demon i'd like to welcome everybody to tonight's webinar which is in regards to trading gold i've had a lot of interest this year so far within regards to safe haven assets for example like gold like silver like the japanese yen so today we're concentrating on one of those safe havens uh one probably the most popular out of the safe havens and that is gold so what we're doing today is we've set up a webinar which is directly for traders which are entering the market now so more beginner traders to traders which have never traded before to traders which are traded into let's say the beginner to intermediate level if you are beginner trader then do not worry of course you can speak to your account manager you can arrange a one-on-one session in which we can go in more def look at the in more advanced ways but today's webinar is going to be very helpful for our traders which is recently over the past few months started to enter the market we're going to be looking at different techniques and different elements you need to keep in mind and take into consideration as part of your analysis when you are trading uh gold so we're going to be looking at correlations uh indications we're going to be looking at how it is linked and entwined with different areas of the market and what is going to be affecting the price of gold when you're able to take all that into consideration you can build a strategy and an analysis which you of course can use going forward so as always i always split the webinar into two sections the first section is going to be a quick introduction to myself and to the company and trading for those traders which haven't previously spoken to me or have watched one of my webinars so very quickly uh as i said my name is mikhali me i am the market analyst here at central so if you do need any assistance anything which is within regards to trading or the markets or strategies or exposure levels anything which is in regards to that area of your trading then by all means feel free to get in touch with me and i'm more than happy to assist you of course if it's something to do with your password and user names and things like this it's better to speak to the support team they'll be much more able and encrypted to assist with you and bear in mind the support team is available by the live chat on the website 24 7. uh of course if it's something to trade in other markets or anything like this feel free to get into contact with me a bit about my background i originally started off as a financial advisor in the uk looking at different areas of the financial trading market so since then i've set up two academies around the globe again based around financial trading markets i've been trading for eight years approximately eight and a half years possibly just over and also i do have the cmap license which is a uk but a uk license and a cystic advanced as well so moving on here at eccentric we are looking at investments more specifically we're looking at cfd investments now it's very important for all traders before making an investment to be informed to be uh you know advised that here at central we are looking at investments now when there is an investment of course there is a risk carried to that capital that you are investing like there is with all types of investments so this is why on our websites we've got this information on every single page at the bottom of every single page you will see this information and this gives you the information you need within regards to the company it's regulation and also the risk involved within regards to the investments so it's important that you read it you understand it and you're comfortable with before proceeding to a full investment uh move it on the last slide before we actually get started by looking at today's subject the content in this video is for informational purposes only do not constitute investment advice accenture assumes no responsibility for any potential errors inaccuracies or missions in this material nothing in this communication contains or should be considered as containing an investment advice or an investment recommendation or solicitation for the purposes or purchase or sale of any financial instrument any views or opinions presented within this material are solely those of the author and do not necessarily necessarily represent those of eccentric unless otherwise specifically stated so what i'm trying to say is part of this slide before we actually get started at looking at today's subject is that this webinar is for educational purposes we do two webinars every single week each webinar is based on something completely different one day we may be looking at a strategy the next day we may be looking at different types of trading techniques like price action or could be risk management or trading plans it could be anything but these videos are for educational purposes they're not there to give you direct financial advice now accenture does not give under any circumstances or on any occasion direct financial advice so you should bear that in mind when you are trading as well so let's start off with market correlations now the great thing about gold then something very very interesting is that unlike other types of assets like for example a stock stock isn't very much correlated with different elements of other markets because it is massively linked to that company solely yes there is correlations all assets in the market have some level of correlations with different other assets but certain assets like for example stocks can be very co very narrowly correlated very few elements whereas when you're looking at gold they are strongly correlated with different elements in the market and that's what we're going to be looking at today because it's strongly correlated it's something which you need to keep into consideration when you are analyzing this acid now the core what do i mean by correlations correlations is when statistically so it's not just necessarily a theory it is something which is proven statistically we can see that the price of gold is correlated with the price of another acid or possibly another event so it doesn't necessarily have to be correlated with one asset where one asset goes up gold will go up as well it can also be correlated with specific events and this is what we're going to look at as part of today's webinar we're going to be looking at the different types of correlations not only what is correlated with gold but what is also both correlated in terms of other assets as well so we're going to look at is it's positively correlated is it inversely correlated the strength of the correlation itself and to what level you can take this into consideration as part of your analysis because it's massively important that you should note that correlations are not 100 all of the time or it doesn't necessarily mean that if one event happens this very second that we're gonna see the correlation kicking straight away so for example gold is massively correlated with the sentiment of the stock market when we've got a bullish stock market uh gold tends to see a lot of strain why because people are more interested to try and earn a more volatile and risky assets like the stock market instead of looking at gold which is known to be more of a safe haven whereas when we've got a bearish stock market in other words a stock market crash then people want to be taking their money generally out of the stock market and be putting their capital in more safe havens like gold and that tends to see gold increase in value that doesn't mean though today if there's a stock market crash that the price of gold today will go up it may do yes and a lot of time it does yes but sometimes you may get a delayed effect you may get a very very delayed effect as well or it may not be infected at all so you need to better some mind as part of the correlations and this is why we're not only going to be speaking about one correlation today but we're going to be speaking about two free so i've got a question from a couple of traders and bear in mind that ladies and gentlemen that if you do have questions you can either ask me questions through the go to webinar software or alternatively and you can send me an email address here uh so i've got a question here from a trader says if you want to read your one-on-one session with you uh what do we need to do if you do want to arrange a one-on-one session then just send an email to your account manager hopefully all of you do have an account manager say you want to arrange a one-on-one session with the market analyst and they would check uh with me when i'm available and book you in for an appointment it is uh as simple as that i've got another question here if we have uh the webinar available in portuguese and now we don't have the webinar available in portuguese but when we do upload it onto youtube because bear in mind all the recorded webinars go on to our youtube page so just go to youtube type in accenture and all of the webinars there do have italian spanish and german subtitles so no we don't have portuguese but maybe you understand some spanish possibly uh and by means you can go on youtube and click one of those free subtitles so carry on with that with the webinar uh gold and the us dollar now with gold this is probably the most spoken about and the most commonly referred to correlation in the markets and it is one of the few correlations which is negative it is an inverse correlation so what do i mean by an inverse correlation generally speaking when we are looking at the markets let's say the u.s dollar in general so not the us dollar against a specific currency pair but when we're looking at the u.s dollar in general and we're seeing the value of the us dollar increasing like so normally what we tend to see is that gold tends to increase now it doesn't necessarily need to increase to the same level that the us dollar is if gold is already extremely low in price it may just stay low so you may see a sideways trend for example i'm just giving you different scenarios here but what we tend to see is when the us dollar is doing extremely well and is extremely expensive and is very bullish we tend to see gold either extremely cheap in a downward in a downward trend or if it's already extremely cheap to have it ranging so moving on with gold and the u.s dollar is in general a rule in the market that uh when the u.s dollar is going up
like we said then gold is going down and when the u.s dollar has gone down gold is going up but like i said this is not always the case and it doesn't necessarily mean if the u.s dollar has seen a specific type of movement this very second it doesn't necessarily mean that that's going to happen and be reflected on the price of gold straight away now the question within regards to why is the two correlated i'll tell you number one the u.s
central bank known as the federal reserves has won the largest reserves in gold in the world so this is one of the reasons for the correlation the other reason for the correlation is the us economy is the biggest economy in the world and it tends to be when the u.s dollar when the u.s economy is in recession or is struggling it is what is viewed by investors as an overall uh interpretation of the market across the globe and life has say gold is a safe haven so when there is uh you know an economic downfall in america or there is a recession or banking crisis like we have seen in the last 20 years then we tend to see gold increase in value why because it's the biggest economy in the world it has the biggest reserves in gold in the world and most investors around the world are trading in that region so when there is a u.s usa recession and the price of bonds are decreasing interest rates are low there's a stock market crash and in general people that are investing in america are seeing very little returns or no returns or even possibly losses on their investments a lot of the time then they're taking their money out of those types of investments and instead investing it in gold of course gold is priced on supply and demand we know that in terms of supply it's very little because it's a rare metal and it has been uh pretty much since the existence of gold and we know that the demand of course is going to cause the volatility in terms of the price because the more people buy the more the price will go up the less people looking to invest in that asset the more the price is likely to go down so as people are taking their money out of the american stock market out of american banks because interest rates are so low out of the bonds and the equity markets etc they start looking at alternatives a lot of the time that's going to be gold and that's what makes the correlation so overall just to keep uh in mind when you are analyzing gold it is very strongly correlated with the u.s dollar when the us dollar
is expensive or bullish then it tends to be downward movements on the price of gold or at least some strain on the price of gold when the u.s dollar is decreasing for whatever reason it may be the lowering of interest rates like we've seen over the past year when the u.s dollar is decreasing and people again are taking the money out of those types of markets and looking at gold gold tends to go up when the u.s dollar is doing well it's increasing and stocks in america are also doing well and there's high interest rates given by the federal reserve in america and people are earning good returns on their investments in american banks then of course people are not going to be looking at gold because it's not earning that much for example they're taking their money out of gold and putting it in more riskier and high yielding investments and as people are taking their money out of gold it causes gold to decrease in value now what a lot of people struggle with and i have a lot of you have had a lot of emails in the past within regards to this because we do speak about the correlation between the us dollar and god quite a lot but and they say to me uh okay i understand there's a correlation i want it as part of my analysis i want to be using the correlation when i'm trading both gold and the us dollar but which u.s dollar pair should i be
looking at which is going to give me the best value of the u.s dollar and to be honest with you when you're looking at currency pairs it's never gonna give you a generic value of the u.s dollar why because it doesn't mean if the euro usd is increasing value that it's increasing in value because of the u.s dollar it may be increasing value because of the counter currency it may be because of that second currency it doesn't necessarily mean it is because of the u.s dollar now the answer to this is you do have an option to instead be looking at the us dollar index now the u.s dollar index is one the best tools that traders have available to them definitely when they're trading the us dollar if we do by any chance have traders here trading the us dollar but also when trading assets which are correlated with the us dollar and like we've just spoken about gold is massively correlated with the u.s dollar
so what is the u.s dollar index now unlike currency pairs or u.s dollar currency pairs is going to give you the value of the dollar against one other currency whereas when you look at the u.s dollar index it is the measurements of the value of the us dollar against a basket of six world currencies and it's actually the six major currencies which they have trade with and we're looking at the value against the euro the swiss franc the japanese yen the canadian dollar the british pound and swedish chrome all very large and well-known currencies so you're not only looking at the value of the u.s dollar against one currency
but against six so if the u.s dollar index is increasing value you can't be pretty certain that it is because of the us dollar and not because of the rest of these currencies why because you are mitigating the measurement of the value of the u.s dollar so like i said you can even be using the us dollar again sorry when you are trading currencies to determine a better value of the u.s dollar or you can be looking at it when you're looking at correlations so how can you be looking at the us dollar index of course you can be looking at it for support and resistance points you can be looking at it to assist you with trends so if you're using stochastic oscillators if you're using moving average crossovers exponential and simple moving averages uh possibly rsi's if you're looking at overbought and oversold their areas but we're not going to be looking at that as part of today's webinar why because we're not looking at strategies so much but what we're looking at is at what steps you need to take when looking to start trading gold so something you can take into consideration is number one the u.s dollars correlation with gold and number two to assist you with that to look at the us dollar index now a lot of traders are probably going to be saying to me the u.s dollar index is not available on
your platforms trade why is it not available because it's not something which is tradable it is you can't trade the us dollar against six currencies at the same time you have to of course exchange the money on six different occasions if you wish to do that so it's not something which is tradable hence why we do not have it on our platform however it is something which is very very easily found very easily found so just by typing in u.s dollar index i found two graphs where i can see the value of the us dollar so here on my left i've got one website it's giving me the value of the us dollar as in the last six months but i can change it i can put it for 10 years 30 years i can put it the value of the us dollar today alone here is another website this is similar to the charts that we see on the mt4 so this is the us dollar index all the way back to november mid november and we can see the type of movements on the us dollar here like most people have been seen on their charts and it's probably not something hard to determine when you're analyzing the markets is that the us dollar is massively uh depreciate in uh in value uh what i wanted to show as part of this slide is that there's different websites um thousands of websites where you can't get a us dollar index charge so this is the value of the us dollar against six major currencies i've got a question here in some relation to this uh past few slides so i'll answer it now and the question is from a lady who's saying uh why is the u.s dollar depreciating there's many reasons why the u.s dollar is depreciating to be honest with you but the main reason for the depreciation dollar over the past six to nine months should we say is that number one interest rates have dropped extremely low it is at record lows that we haven't seen for many years that is a massive turnoff for investors because they're not earning much in american savings accounts and currency counts and american investments this is one of the reasons and it's causing people to shy away from investing in america and it causes a drop in the demand another reason is the u.s dollar stock market has been doing extremely well lately for this reason again people are instead of looking at current accounts and the us dollar are instead looking at the stock market and this is another reason another few reasons uh we've had the senate in america unable to agree on an economic economical fiscal policy in terms of assisting families and small to medium-sized companies with regards to coping with the current prices and that again is causing a lot of strain on at the u.s dollar so there's a lot of
reasons uh within regards of why we see such a massive drop in the us dollar but you probably don't have much time to go into much depth within regards to all of them but the main reason is because the inflation in america has become very low interest rates in america have become very low as well so hopefully that's uh answered at least partly your question so moving on to different type of correlation now the correlation i want to speak about now is that within regards to gold and the stock market this is quite a strong uh correlation as well though it's not known to be as strong as the us dollar against the eurostar inversely correlated with gold now like i said the stock market is known to be uh area of the markets where more risk adverse traders tend to be trading and when i say that i'm referring to not trade this trade in cfds and price movements but traders actually trade in the physical stocks themselves so a lot of traders when there is good economic performance there's bullish markets there's a bullish and hawkish sentiment in the market they tend to look at these types of markets so the american stock market when there is this type of sentiment in the markets and when in general stocks are increasing in value and we see movements like this for example then there tends to be a lot of strain on gold why because not a lot of people are interested in looking at gold but instead looking at apple stocks amazon stocks netflix stocks and even small to medium-sized company stocks as well on smaller exchanges so this is the reason why there is a correlation when we tend to see stock market booms we tend to see the price of gold drop dropping or at least seen a lot of strain when there is a stock market crash we tend to see this price of gold starts to increase why because people are selling their gold their stocks as quickly as possible and instead of looking at uh just keeping it in there savings accounts of current accounts and looking at the safe havens for example gold yes there's not only gold which is a safe haven and also silver the japanese swiss franc etc but gold is definitely and has been for very long time the most popular out of the safe havens uh now why if we look at that the current stock market we can see the stock market is actually doing quite well uh if we're going back quite a few months let's say at two to three to four months we can see the stock market was doing even better so a lot of people are probably thinking as to why has gold still why is gold still much more expensive now than it was a year ago whereas stocks are more expensive now than there were a year ago and the answer to that is number one interest rates around the world are extremely low we've had the coveted 19 pandemic most economies around the world are in are in a recession and this is why we've seen gold this year peak at levels we haven't seen uh in a very long time uh in my experience i've never seen gold at this level personally but uh definitely the stock market did start to take an effect on gold what you'll notice is when the stock markets are recently over the past few months uh start to hit new highs and stocks are reaching new price highs we've seen stock splits for example because uh stock prices have become extremely extremely high where it uh where the company wants to keep people investing like for example apple like for example tesla and when this started to happen we have actually seen the price of gold start to lag and start to drop and at times it dropping slightly and then moving in a range now yes the value of gold is still much higher than it was a year ago why because of these uh facts that we looked at and i just mentioned now covet 19 interest rates extremely low inflation extremely low unemployment rates much higher than there were a year ago so this is why gold is much more expensive than it was a year ago but at the same time the stock market is doing extremely well uh compared to let's say six to nine months ago which is why it's still more expensive than it was a year ago so the stock market has put a lot of strain on gold believe me if the stock market was still crashing we would have seen gold still continue to move up in value but the sentiments and the health and the price movements of the stock market is continuously changing so this is one of the correlations you need to keep into consideration when you are analyzing gold and the price movement so number one we've had uh the u.s dollar which is inversely correlated we've had the u.s dollar index which you can use to situate the u.s dollar and secondly we have stock markets now it's going to be very very difficult to determine uh the sentiments and bullish and bearish markets in the stock market when you're looking at stocks individually so this is with the reason why you can instead of using stock markets stocks individually you can use instead indexes or also sometimes known in the market as indices and you can see this on our website here now you will notice under the indices we have uh free indices on our platform we've got uh the us-30 known as the dow jones we've got the us 500 known as the s p 500 and also the u.s tech which is the nasdaq these are all indices which are the price of that specific stock market overall so for example the nasdaq 100 is a great indication of how that specific stock market is doing it doesn't necessarily mean that every single stock in that stock market is increasing or decreasing but it is an overall of the price within that specific market so if you are looking at correlations between stocks and stock markets and gold you can use these indices to assist you so if you're getting an indication uh let's say you're using a strategy where you're using crossovers of exponentials and simple moving average and stochastic prospects and they're giving you an indication that gold is going to increase in value then before you're entering into that trade you're of course going to continue to your evaluation show your analysis and you're going to check the stock markets check the u.s fairly the us 500 the u.s
tech to make sure that they are dropping in value or at least ranging or seem to be having a lot of strain within regards to their price movement before buying gold then what type of movement are you seeing on the us dollar index is it going up or is it going down so you're checking the correlations before looking and listening to the indications on the charts of god itself now i wanted also not only to look at correlations of gold but also to look at what what um uh currency pairs are also strongly correlated with gold so not so much looking at gold but looking at the currency itself now the australian dollar is massively and seems to be an increasing uh increasingly used correlation especially over the past nine months since coffee 19. there is a strong uh positive correlation between the australian dollar and gold whereby when gold is increasing in value we also see a lot of positive movement on the australian dollar against the u.s dollar why because number one the u.s dollars inversely correlates to the gold and number two because australia is actually the second largest producer of gold in the world number three australia is uh what is known as a commodity and exporting economy the economy is massively based around high gdp based around deporting their commodities which are produced within that region uh for example coal for example iron for example likely speaking about here gold it is the second largest producer of gold in the world so this is why when not only gold but commodities as well are increasing in value we tend to see a lot of positive movement on the australian dollar now we can very simply see this just by looking at the chart so here this is the chart from our website this a weekly chart if we look at uh 2020 this year so far we can see yes at the beginning of the year we saw very negative movement why did we seen a very negative movement of one oil was massively crashing uh in this area of the markets number two the u.s dollar was increasing so
gold was decreasing and then we started to see people shy away from america and the american economy and start to look at different areas of the market gold started to increase we started to see lockdowns in this area uh full complete lockdowns worldwide people started to shy away from risk based assets and look more at safe havens now as gold started to increase we can see how it has been supported or supporting the australian dollar against the u.s dollar so we had u.s dollar gold from all the way down here all the way up to here now this is a value that we haven't seen in over three years for the u.s dollar sorry for the australian dollar against the u.s dollar and we managed to do that only in less than nine months i would say so we can see how strongly the us dollar is correlated with uh gold we can very clearly see from the charts here so again if you're also looking to use gold as a correlation when trading forex you can't do so when you're trading number one the swiss franc the japanese yen uh the us dollar but mainly the us dollar against australian now as we're coming up to at the end of today's webinar of course we want to look at gold this is gold on a daily chart we're looking at gold here over the past six months we can see here where we got our high on the honor gold where we saw massive increases and we can see hit a high that we haven't seen before since then we have seen downward trends we can very clearly see here we started to see lower uh swing highs we've got a massive low and low here as well then we started to see a range out to approximately this area here then we got a new low that we hadn't seen since july but then we have seen since december the price start to increase again why the price starts to increase again because economies around europe started to go into lockdown lockdowns again full lock downs uh for example uh in the uk we saw a full lockdown as well in america we saw a full lockdown as well i won't go for a list of all the countries but uh i'm sure you've seen the news within regards to this uh we saw uh also the us dollar start to come under a lot of strain again we've got a new low on the us dollar we started to see some crap minor minor crashes and minor poor movements are on the stock market as well and what this has all done is created this nice upward movement on gold what is gold at the moment is currently at a neutral area so we're currently trading at uh the middle of the chart we trade in a neutral area but when we're looking at the crossovers we can definitely see the crossover is crossing over upwards we can see the stochastic oscillator is also crossing over upwards so that's given us indications of upward trends however you do need to bear in mind that we're currently at a major resistance level so we can see we have resistance levels here and we're close to this resistant level here also we're looking at the stochastic oscillator we can see we are again currently at the resistant level so this possibly could be an area that we could see a change in trend possibly or possibly even a retracement before we see a continuation of the trend again this is only taken into consideration the two indications on the charts the two moving averages and the stochastic oscillator so again you do need to take into consideration other elements in the market like for example at the correlations and like for example all those strategies that we have been speaking about over the past a few weeks via our webinars now like i said we do not give any financial advice and we cannot give you the direction in which gold is gonna move however we do have a partnership with trader central trading central is a very well established company completely unrelated and independent from accenture uh trading central uh is a company that you can't find on google if you just type in trading central's a lot of information with regards to them their analysts their signals and their regulation so if you go to our website you click on trading analysis and then click on chart analysis what you get is different signals like you can see here on the website now part of these signals they will actually tell you the direction they believe the market is going to move what price they think is going to move to and of course they release signals every two hours so if something does happen because a lot of the time there is a change in the market and the market may move in the opposite direction of course they release a new signal to inform you of that and you can also look to get sms signals twice a day from trading central if you wish as well and if you're interested to do so by all means let us know let your account manager know and he'll get you signed up for those series but just again to recap that you can get signals within regards to how the market may move just go to trading analysis chart click on type uh click on charts analysis and it will take you to the analysis where it's going to give you like we can see from the charts it's going to give you a pivot point which case any movement above it you're going to be looking at buyers any movement below it you're going to be looking at sales it's going to give you with the arrow and the lines here the targets if it's below the targets if it's above and so on and so forth so this is also very helpful as well if you're looking to get some signals and some assistance on your analysis what i will say with regards to gold so the very last thing i'll say because we are running out of time here is that gold is volatile it's not the type of asset where you don't see a lot of volatility so when you are looking at gold then you are looking to use a stop loss because stop losses are good ladies and gentlemen they can protect you from excessive losses which is good it is uh the advantage of using stop losses but what a lot of people do is they're not willing to risk enough movement and market to give the market time and when trading you gotta bear in mind that the market does this it's not going to move in one direction there is a lot of volatility especially with gold now this is why you mustn't put your stop loss too close now what do i mean by too close there is no point put it putting in a buy with gold which is priced let's say at 1800 dollars and putting your stop loss in at 17.95 there's not
much of a point why because it's most likely going to hit your stop loss so keep this in mind when looking at the market for example you can see here if you are trading in this area of the market and you are trading a buy it is a good trade why because the markets does continue to go up over here it does go up but there is volatility you can see the price dropped all the way down to here so you must be able to take into consideration that you have to leave enough room and movement for the price when looking at the volatility and the stop losses of course it depends on your type of analysis your type of analysis may take into consistent consideration this type of movement in which case you wait for that movement to happen and then you trade looking at this type of movement in which case yes you don't need such a big stop loss so far away but you need to take into consideration how your stop loss is going to work with the volatility of the asset and your strategy and if you need to do that by all means we always have this the demo account available to you ladies and gentlemen so you can use and test different scenarios out so that's going to bring us to the end of today's webinar bear in mind ladies and gentlemen over the next 24 hours you will get a link to the recording of the webinar so don't worry if you join later on in today's webinar i can see nine people have joined in the last couple of minutes alone so don't worry you will get a recording of the webinar in the meantime if you do need any assistance please feel free to get into contact with me alternatively uh feel free to send me an email or send me a question through the go to webinar software in the meantime enjoy the rest of your evening i hope you found today's webinar informative and educational trade safe and trade responsibly thank you and good night
2021-01-13 02:47
