A simple analysis on GOLD revealed a great info that can be successfully used in trading the precious metal.
- we analyzed 893 days from the 2nd of February 2015 and up to the 13th o February 2018
- we studied the daily candles of the researched period
- the source of the prices is LMAX Exchange
Results and interpretation
- in 80% of the cases, the price of a day reached the HIGH or the LOW of the previous day
- this means that it is highly probable for the price of any given day to reach the high or the low of the previous day
- the high/low of the previous day can be used as TP or SL as it is highly probable for those levels to be reached
While this analysis may seem trivial, it is a good starting point for a future strategy that has the potential to make constant profits. Simple things are likely to work in trading Gold or any other instrument. For getting more precious insights on gold, we will dig further into this analysis and look for the following:
- calculate the probability of gold to reach BOTH previous day’s HIGHS and LOWS in the same day.
- filter the data and extract the days with high impact news on gold. This could offer us great information because, usually, news days are highly volatile