Technical Analysis: Double-Cross Advanced Gold Trading Strategy
The Double-Cross advanced gold trading strategy is used by many professional traders to trade the gold in the longer time frame. Traders use two exponential moving average and simple moving average and the modified RSI in this strategy.5 and the 15-day exponential moving average is used to identify the possible entry point in the gold chart whereas the 100-day simple moving average acts as a trend indicator.
If the price is trading above the 100 days moving average trader only look for buying opportunity whereas short trade is executed when the price stays below the 100 days moving average. The modified RSI which has 5 day period acts as trade filter in this strategy.
Let’s see an example Double-Cross advanced trading strategy setup:
Figure: Trading the daily gold chart with advanced 2 cross gold trading strategy
In the above figure, trader looked only for selling opportunity since the price was trading below the 100 days moving average. When the 5-day exponential moving average crosses below the 15-day exponential moving average, traders look for price action confirmation signal in the chart. A nice bearish evening star was printed on the chart during the bearish EMA crossover.
Once both conditions are meet traders look at the modified RSI reading to filter the false signal. If the RSI reading is above the 70 line trader go short in gold by setting a tight stop loss just above the confirmation candlestick pattern. Some traders also prefer the period 9 instead of 5 in the RSI setting while trading the gold. Professional traders alter the value of RSI setting depending on the market conditions and price movement.
In general, higher volatility results in the smaller period of RSI setting. Though the system is extremely profitable and has cutting edge performance its imperative that traders use proper money management while buy and sell gold with 2 crosses advanced trading strategy.