The actual purpose of trading is or should be to earn daily pips as per capital. Whether gold is best or other currency pairs is quite subjective. As traders enter the forex and commodities markets, one of their first questions should be “Should I trade XAUUSD (Gold vs US Dollar) or focus on currency cross pairs?” Both offer opportunities; which is simpler will depend on your style, risk tolerance, and market knowledge.
Why XAUUSD Is Attractive to Many Traders
Obviously, everyone wants to earn or become rich quickly. This wish also causes big loss for traders. XAUUSD is one of the world’s most heavily traded instruments. Gold has traditionally been seen as a safe-haven asset, leading many traders to invest in it when times become uncertain. Here’s why trading XAUUSD may feel less intimidating:
XAUUSD & DXY
Gold’s movements often mirror that of the US Dollar Index (DXY). If the dollar weakens, gold tends to increase and vice versa. This allows it to move in predictable patterns at times.
High Liquidity In Gold Trading:
The gold market offers ample liquidity, decreasing the chances of abrupt slippage.
Gold’s Technical Levels Are Important for Scalping:
Gold respects support, resistance, and Fibonacci levels, effectively making it attractive to technical traders. In some cases, gold can break every level so which is why special training is needed to trade in gold.
Gold can be extremely volatile. Daily swings of $20-50 can occur, leading to both increased profits and an increase in risk if managed improperly.
Can I Earn Profit in Cross Pairs?
Cross pairs (such as EUR/JPY, GBP/CHF, or AUD/CAD ) do not directly involve the US Dollar; instead, they reflect economic strength between two economies. When trading cross pairs, it can be easier in certain instances:
Cross Pairs Provide Diversification:
If you want your trades to be less exposed to US economic news, cross pairs offer diversification.
Trend Opportunities In Cross-Currency Pairs:
Pairs like EUR/JPY can move steadily for weeks, giving swing traders ample room to capture big moves.
Lower Volatility is expected in cross-pairs:
Cross pairs typically feature more steady price movements compared to the dramatic fluctuations experienced with XAUUSD.
Cross pairs may suffer from lower liquidity compared to majors, leading to wider spreads and slower execution.
So Which One Is Easier? If you thrive on volatility and can handle quick market moves, XAUUSD might feel easier due to its strong technical performance and global relevance. Conversely, cross pairs might provide steadier trends without constant exposure to US Dollar.
Ultimately, neither is “universally easier.” Which option best fits your trading style will depend on its individual components – scalpers may find XAUUSD more exciting while swing traders might prefer cross pairs instead.
Back-test your strategies before choosing an instrument that suits your temperament. In short, every trader must know how much time for trading he or she has and what is current equity? Gold trading often requires more capital than currency pairs. If you can arrange only a little equity and can wait or watch the market for the whole day, then yes, you can go for currency trading.
