Proven

Techniques
to Beat the Market

Gold Mastery with

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 Proven

Techniques
to Beat the Market

Gold Mastery with

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Table of
Contents
Introduction to Gold 2

Gold Trading Basics 4

Factors that Influence the Price of Gold 6

Correlation Between Gold and U.S Dollar 9

Reversal Formation 11

Tips for Trading Gold Market 20

Conclusion 23

Proven Gold Techniques to Beat the Market 1

Introduction to

Gold
W
hy is everyone talking about Gold, what is Gold all
about? Gold is one of the most popular assets that
traders use in the forex market. It is a valuable
resource that has been used for centuries to make jewelry, coins,
and other decorative items. Today, gold is still a popular
investment option because it is seen as a stable asset that holds
its value over time. Gold is traded on the forex market like any
other currency pair. The value of gold is tied to the USD, EUR, or
GBP. This makes it easy for traders to buy and sell large amounts
of gold without worrying about price fluctuations in another
currency.

Alongside the Forex market, Gold is one of the most popular

markets for retail traders and speculators to
trade. The reason for this is because Gold will often make large
moves that lead to healthy profits.

Proven Gold Techniques to Beat the Market 2

While gold has generally held its value for centuries, traders’
interest has waxed and waned in recent years. From the early
1980s until the early 2000s, there was little interest in trading
safe haven gold amidst the strong, stable economic growth and
high-flying stock markets. As a result, gold generally
consolidated between $300/oz and $500/oz for twenty years,
from 1982-2002. Interest in gold grew slowly through the 2000s
before exploding with the onset of the Great Financial Crisis in
2008. Gold prices rose in sympathy, hitting an all-time high
above $1900 in late 2011. In this book, we will discuss the major
forces that drive gold prices, along with the best trading
strategies you can trade the Gold market on both the higher
and shorter time frames.

Proven Gold Techniques to Beat the Market 3

Gold
Trading Basics

G
old is a very distinctive market and has some
individual traits unlike other markets. Over the years
Gold has been considered a safe haven market. When
everything else like the USD or stock markets are going through
extremes, traders have often flocked to the Gold market which
has seen it's price increase. For this reason Gold can tend to go
on long sweeping trends higher that can last from weeks to
months on end. There are multiple ways you can trade and
invest in Gold. Whilst one of the most common methods is
using CFDs, you can also physically buy Gold bars, trade options
and also use futures contracts.

Proven Gold Techniques to Beat the Market 4

 How Gold Works Within the
Forex Market

Most of the Gold trading is done in a similar method to how

Forex is traded. Instead of physically buying Gold bars, most
investors and traders are using contracts such as CFDs. With
CFDs you are not buying the physical asset, but instead you are
purchasing a contract. This contract is a speculation on whether
the price will go higher or lower on the underlying asset. For
example; if you trade a CFD on Gold, you are not buying a Gold
bar, but trading on whether the price of Gold will go higher or
lower. You do not physically own any Gold. Whilst Gold can be
traded in other currencies, it is normally traded against the USD.
This makes it a more standard price around the world. This is
important to keep in mind because what the USD is doing will
play a large role in how Gold is behaving and trading. Because
Gold is seen as a safe haven market because it is a physical
product with a limited supply, traders and investors will always
flock to it when other markets are becoming risky. Keep in mind
unlike a currency where more and more can just be printed,
there is a set amount of Gold and it cannot be recreated.

Proven Gold Techniques to Beat the Market 5

 Gold (XauUsd) Trading Hours

A very large reason that retail traders and speculators love

trading the Gold market is because it is open 24 hours a day and

five days a week. Unlike individual stock markets that are only

available to trade during their set sessions, the Gold market is

open all week. Important note: many brokers will close or turn

off their servers for one minute at the end of the day. They do this

because during the period between when the market closes

and reopens the volume becomes very thin. This can lead to

large spikes and traders getting stopped out when they

shouldn't be.

Proven Gold Techniques to Beat the Market 6

Factors that Influence the

Price of Gold

G
old is one of the most difficult financial assets to value.
Gold is similar to a currency like the U.S. dollar or the
euro because it is durable, portable, uniform across
the world, and widely accepted; however, unlike these more
commonly traded currencies, gold is not supported by an
underlying economy of workers, companies, and infrastructure.
In other ways, gold is more similar to a commodity like oil or corn
because it comes from the ground and has standardized
physical characteristics, unlike other commodities, though the
price of gold often fluctuates independently of its industrial
supply and demand.

1. The value of the US dollar: Gold is priced in US dollars, so when

the US dollar falls in value, the price of gold rises, and vice versa.

2. Political instability: Unstable political conditions can lead to

uncertainty in the markets, which can cause investors to buy
gold as a safe haven investment.

Proven Gold Techniques to Beat the Market 7

3. Economic data: Data released by the US Department of
Commerce, Bureau of Economic Analysis can hugely affect gold
prices. The employment report is one example, with
unemployment numbers having a very direct impact on gold
prices. Other indicators, such as durable goods orders can also
influence gold prices.

4. Central bank activity: Many central banks, including the

Federal Reserve in the US and the Bank of England, hold gold in
their reserves. When these banks buy or sell gold, it can have a
significant impact on the price of gold.

5. Supply and demand: The availability of gold in the market

and the level of demand from buyers affects the price. If there is
more demand than supply, the price will go up, and vice versa.

6. Other precious metals: Gold prices are often affected by the

price of other precious metals, such as silver and platinum.
When another metal is in demand for industrial or commercial
purposes, gold will benefit too. For example, when platinum
prices increase due to high demand for its use in catalytic
converters, which reduce air pollution in cars, gold prices will
rise too.

Proven Gold Techniques to Beat the Market 8

7. Currency markets: Gold is traded in dollars, so if the US dollar
falls in value, it makes gold more expensive for foreign buyers. If
the value of the US dollar rises, it can make foreign investors sell
their holdings of gold to take advantage of the increase in value
of their currency.

8. Geopolitical events: Unusual geopolitical events, such as

wars or terrorist attacks, can cause a spike in the price of gold as
investors seek to protect their assets. As you can see, there are
many factors that can affect the price of gold in the forex
market. By understanding these factors, you can better predict
how gold prices might move in the future.

Proven Gold Techniques to Beat the Market 9

Correlation between Gold and
the U.S. Dollar

O
ne of the biggest points of contention for gold traders
is the true correlation between gold and the U.S.
Dollar. Because gold is priced in the U.S. Dollars, it
would be logical to assume that the two assets are inversely
correlated, meaning that the value of gold and the dollar move
opposite to one another. In layman’s terms, it takes fewer dollars
to buy an ounce of gold when the value of the dollar rises, and it
takes more greenbacks to buy an ounce of gold when the value
of those dollars is lower. Unfortunately, this overly simplistic
view of the correlation does not hold in all cases. The chart below
shows the correlation between gold and the U.S. Dollar from
2008 - 2020. The correlation coefficient measures how closely
together gold and the U.S. dollar have moved over the last 12
years.

As you can see, the correlation is negative the majority of the

time, showing that the U.S. Dollar does tend to move opposite to
gold. However, it has also shown a tendency to spike rapidly in
periods of financial stress, such as in the depths of the Great
Financial Crisis in early 2009 and the end of the first iteration of

Proven Gold Techniques to Beat the Market 10

Quantitative Easing in mid-2010. This is because traders will buy
both gold and the U.S. dollar a “safe-haven” asset in periods of
uncertainty. Traders who blithely traded on the assumption
that gold and the dollar are inversely correlated would have
encountered a couple periods of tough market conditions and
likely losing trades over the past few years. Gold’s correlation
with the U.S. dollar is one crucial piece of the puzzle.

Proven Gold Techniques to Beat the Market 11

Reversal
Formation
M and W Pattern

T
his is the last forex strategy you will ever need. M / W
formations or "double tops/bottoms" are common
reversal signs. This Forex trading strategy is a strategy
that uses specific chart patterns as the base for low-risk entries
on trades with a high probability of success. Specifically, we will
look at double tops and double bottoms that look like the letter
M or W. Once such a pattern is identified, we will take an entry at
the break of the neckline of the pattern. It can also be called
double top and a double bottom

Proven Gold Techniques to Beat the Market 12

 Anatomy of an M And W Patterns

The M or W pattern is a frequently identified pattern and is a

particularly good reversal pattern. The following diagram shows
the reasons for the movement in terms of the market maker's
use of the pattern. The time gap between the 2 peaks of the M or
W will usually last for somewhere between 30 and 90 min
(though occasionally longer). Now before going off to the charts
and start trading every M/W you see, let’s go over some
characteristics of these patterns, and why they happen.

Proven Gold Techniques to Beat the Market 13

Proven Gold Techniques to Beat the Market 14
Proven Gold Techniques to Beat the Market 15
 How to Trade the M/W Pattern

This M and W is a strategy that uses specific chart patterns as

the base for low-risk entries on trades with a high probability of
success. Specifically, we will look at double tops and double
bottoms that look like the letter M and W. Once such a pattern is
identified, we will take an entry at the neck of the pattern for a
valid confirmation.

1. The M and W pattern help us to identify major market

reversals
2. This M and W pattern helps us minimize risk, and maximize
profit in taking a trade
3. The M and W pattern It is very easy to spot on a charts
4. The M and W pattern can be traded on all time frames, the
higher the timeframe, the higher the probability of the
setup
5. With the M and W pattern, you can take trades with high risk
to reward ratio.

Proven Gold Techniques to Beat the Market 16

 Morning and Evening Star Pattern

The star formation consists of two basic star patterns Evening /

Morning star. Morning and Evening star candles are often
described as indecision candles. The evening star and morning
star are reversal candlestick patterns that signal the end of an
uptrend in price. These can be ideal entry points for new trades
after a sustained bullish rally.

Morning Star Evening Star

Proven Gold Techniques to Beat the Market 17

 Morning Star
The Morning Star Pattern is viewed as a bullish reversal pattern,
usually occurring at the bottom of a downtrend. The pattern
consists of three candlesticks:

1. Large Bearish Candle (Candle 1) The first part of a Morning

Star reversal pattern is a large bearish red candle. On the first
candle, bears are definitely in charge, usually making new
lows.

2. Small Bearish Candle (Candle 2) The second candle begins

with a bearish gap down. It is clear from the opening of the
first candle that bears are in control. However, bears do not
push prices much lower. The candlestick on the second
candle is quite small and can be bullish, bearish, or neutral
(i.e. Doji).

3. Large Bullish Candle (Candle 3) Day 3 begins with a bullish

gap up, and bulls are able to press prices even further
upward, often eliminating the losses seen on the first candle.

Proven Gold Techniques to Beat the Market 18

Proven Gold Techniques to Beat the Market 19
 The Evening Star
The Evening Star Pattern is viewed as a bearish reversal pattern
that usually occurs at the top of an uptrend. The pattern consists
of three candlesticks:
1. Large Bullish Candle (Candle 1) The first part of an Evening
Star reversal pattern is a large bullish green candle. On the
first candle, bulls are definitely in charge, usually making
new highs.

2. Small Bullish Candle (Candle 2) The second candle begins

with a bullish gap up. It is clear from the opening of the first
candle that bulls are in control. However, bulls do not push
prices much lower. The candlestick on the second candle is
quite small and can be bullish, bearish, or neutral (i.e. Doji).

3. Large Bearish Candle (Candle 3) Day 3 begins with a bearish

gap down, and bears are able to press prices even further
downward, often eliminating the losses seen on the first
candle.

Proven Gold Techniques to Beat the Market 20

Proven Gold Techniques to Beat the Market 21
 How to Trade the Evening and Morning Star Pattern

The evening star and the morning star are both highly reliable
patterns that can signal bullish or bearish reversal in an existing
trend. The reliability of the pattern depends upon the gap
between the second candle and the first. If there is little to no
gap then this increases its chance of being a valid pattern, same
goes for if there is only a small body overlapping

1. As with most candlestick patterns, the individual notes in

this pattern must be filtered with additional analysis to
ensure a high probability of success.

2. The best time to trade these is after the market has

consolidated for several hours with an established trend. It is
ideal if price action confirms the morning star or evening
star, but this isn't necessary. These patterns are also more
significant when they appear at the top or bottom of a trend.

3. When trading both of these patterns, you should place your

stop loss slightly below the second small real body. If price
fails to close below this level, it would invalidate both
patterns.

4. When trading the morning star pattern, you should enter

long when price closes above the high of the third
candlestick. When trading the evening star pattern, you
should enter short when price closes below the low of the
third candlestick.

Proven Gold Techniques to Beat the Market 22

Tips for Trading
Gold Market
1. Monitor important and upcoming news event:
Watch and monitor the important news events that could
impact the price of Gold. The USD will often play a huge role in
where the price of Gold moves.

2. Day Trade with New York:

Gold is a nearly 24-hour market, but peak liquidity is typically
found during New York trading hours. Whether you should
target trades during or after New York trading hours depends
on your goals. Whereas trades during peak activity offer high
liquidity and low volatility, making them good targets for safe-
haven positions, off-hours trading can provide the extra
volatility needed to execute scalping strategies. At the same
time, this extra volatility increases the relative risk of any trade.

Proven Gold Techniques to Beat the Market 23

3. Consider Geopolitical Implications on Currencies:
When political or economic uncertainty creates concerns about
currency prices, gold can be a stable safe haven that protects
your liquid assets. Gold tends to be strongly correlated to the
U.S. dollar, as well as other stable currencies such as Japan’s yen,
and opening a position with XAU/USD can be a reliable means of
protecting your assets from unpredictable situations affecting
other forex markets.

4. Monitor Central Bank Buying:

Central banks tend to buy gold as a hedge when they’re
anticipating volatility in certain currencies.
Recently, for example, China and Russia made headlines for
making significant investments in gold, which reflected their
concern about the future price of the U.S. dollar and the euro,
among other major global currencies. When central banks start
buying gold in large amounts, it tells forex traders two things.
First, governments are operating out of a belief that major
currency values may dip, which could encourage traders to
move a greater percentage of their investments into less volatile
funds.
Second, increased central bank buying typically causes an
increase in the price of gold—at least in the
short term. If gold prices start trending up, it could be an
opportunity to turn a quick profit.

Proven Gold Techniques to Beat the Market 24

5. Track Real Interest Rates:
Gold has a well-documented correlation with real interest rates,
with prices rising as interest rates decline and prices dropping
as interest rates rise. The real interest rate is determined by
subtracting the inflation rate from the nominal interest rate,
resulting in a percentage gain or loss that takes inflation into
account. Historically, gold prices tend to rise when the real
interest rate dips below 1%. By watching this interest rate as it
changes over time, you can identify a strong buying
opportunity—especially if you’re looking for long-term trading
opportunities. By contrast, a real interest rate above 2% likely
deflates the value of gold. Many experts will recommend a sell
on XAU/USD if the real interest rate reaches this threshold.

Proven Gold Techniques to Beat the Market 25

Conclusion
Be patient and let the cleanliness and sharpness
of the pattern show.

1. Risk management is the only way to be a successful trader

because in forex you win some and you lose some, what
makes you a real winner is how you control and minimize
your losses.

2. In trading this asset and managing your risk level properly,

there are certain things you are to put into consideration.
Margin requirements are much higher here compared to
currencies. Spread is something to pay close attention to,
and even gain mastery of in terms of calculating it for entry.

Proven Gold Techniques to Beat the Market 26

3. Proper funding is a very big determinant, your account
needs to be properly fed with capitals, this is essential if
proper risk management must be employed, you cannot
really manage what is almost dead, little funding implies an
account ready to blow up (be lost), the more the funds the
more likelihood for success, mostly with the right
applications. Risk management is solely dependent mostly
on how much of the account you intend to put at risk,
advisably 2% of an account’s capital should be the maximum
to be risked per trade, anything outside this, places an
account at an unrecoverable risk position, a risk you can't
recover from is already a lost account staring at you.

4. Trading is not a get rich quick scheme. Following our Signals

or engaging on your own trading strategy requires patience
and discipline.

5. Trading takes investing your time to build a knowledgeable

foundation, practice in a demo environment, moving to a
live environment and dealing with the psychology behind it

Proven Gold Techniques to Beat the Market 27

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Proven Gold Techniques to Beat the Market 28