Proven Intraday Strategy for Gold Spot XAUUSD

Although trading XAUUSD (gold) can be quite profitable, it can also be very unpredictable if you don't have a good plan. I've created and tested a method over time that uses the Directional Movement Index (DMI), which includes ADX, and the Stochastic RSI to reliably assist me in identifying high-probability setups. I'll take you step-by-step through my identical approach in this post.

So, We going to cover following topics in this blog:

1. XAUUSD Buying Strategy
2. Gold Selling Strategy
3. Important Indicators

Indicators

1. Stochastic RSI : A momentum oscillator that calculates the RSI level over a given time period in relation to its range. It assists in identifying possible price action turning points.
2. Directional Movement Index (DMI) and ADX

Time Frame

One Hour 

Rules to Buy

Search the XAUUSD chart for a Buy Setup exactly like this:

Step 1: Stochastic Crossover of RSI

Observe when the Stochastic RSI's blue line crosses above the orange line. This indicates bullish momentum and a possible upcoming green candle.

Step 2: DMI Confirmation

• On the same candle that the stochastic RSI crossing occurs, look at the DMI.
• The ADX line and the orange DI− line must be below the blue DI+ line.
• This demonstrates that consumers are in charge and that the tendency is getting stronger.

Step 3: Point of Entry

Put your buy order above the candle's high when the two aforementioned requirements are satisfied.

Step 4: Put an End to Loss

To safeguard yourself in the event that the trend falters, set your stop loss at the previous swing low.

Step 5: Determine Your Profit Objective

 The aim is when the blue DI+ line drops to the lowest of the three DMI lines (DI+, DI−, and ADX). This is where it becomes a little different. This implies a weakening of the bullish momentum.

Rules to Sell

Search the XAUUSD chart for a Short Sell Setup exactly like this:

Step 1: Stochastic Crossover of RSI

Observe when the Stochastic RSI's blue line crosses below the orange line. This indicates bearish momentum and a possible upcoming red candle.

Step 2: DMI Confirmation

• On the same candle that the stochastic RSI crossing occurs, look at the DMI.
• The ADX line and the blue DI+ line must be below the orange DI− line.
• This demonstrates that consumers are in charge and that the tendency is getting stronger.

Step 3: Point of Entry

Put your sell order below the candle's low when the two aforementioned requirements are satisfied.

Step 4: Put an End to Loss

To safeguard yourself in the event that the trend falters, set your stop loss at the previous swing high.

Step 5: Determine Your Profit Objective

The aim is when the orange DI- line drops to the lowest of the three DMI lines (DI+, DI−, and ADX). This is where it becomes a little different. This implies a weakening of the bearish momentum.

Frequently Asked Questions (FAQs)

1. How frequently does this method produce trading signals?

You should expect 1-3 quality indications per day on the 15-minute chart during active market sessions (like London or New York). Patience is key-avoid overtrading.

2. How precise is this approach?

Even while no approach is 100% accurate, many weak setups are filtered out by combining stochastic RSI and DMI. You can sustain a positive risk-to-reward ratio and steady success with the right risk management and discipline.