Bullish or Bearish Depending on Breakout Direction
| Strategy Type | Trend Following / Momentum Breakout |
| Market Outlook | Bullish or Bearish Depending on Breakout Direction |
| Risk Profile | Defined by Breakout Level and ATR-Based Stops |
| Reward Profile | Trend Extension Targets; Trailing Stops for Extended Moves |
| Time Horizon | Intraday to Multi-Week Swing |
| Indicator Type | Price Breakout with Momentum Confirmation |
| Signal Type | Trade Breakouts of Key Levels with Volume/Momentum Confirmation |
| Primary Instruments | COMEX Gold Futures (GC) via SGX-accessible brokers, SGX USD/CNH Gold Futures, Gold ETFs (GLD, IAU), Gold CFDs |
| Trading Hours | Electronic: Nearly 24 hours; Core: 8:20 AM - 1:30 PM EST (8:20 PM - 1:30 AM SGT next day) • Various sessions depending on contract • 24 hours Sunday evening to Friday (forex hours) |
| Key Sessions Sgt | 7:00 AM - 4:00 PM SGT • 3:00 PM - 11:00 PM SGT • 8:00 PM - 5:00 AM SGT |
| Currency | USD (Gold priced in USD globally) |
| Default Settings | 20-period breakout; ATR multiplier 2.0; Volume confirmation |
| Liquidity Note | Best liquidity during London and US overlap (9:00 PM - 11:00 PM SGT) |
| Typical Holding Period | Hours to weeks depending on timeframe |
Options include: COMEX Gold futures via international broker (IB, Saxo), gold CFDs, gold ETFs (GLD, IAU), or SGX gold products. CFDs and micro futures are good for smaller accounts.
Start with 4-hour or daily charts. These timeframes have cleaner breakouts and less noise. Once experienced, you can move to shorter timeframes.
Confirm with: (1) Above-average volume, (2) Momentum indicators (RSI > 50 for long), (3) Clean close beyond level, (4) Follow-through in next few bars. Not all will work, but confirmation improves odds.
False breakouts happen due to: (1) Lack of volume/conviction, (2) Counter-trend breakout, (3) Major resistance just above, (4) News reversal. That's why confirmation and stops are essential.
CFDs: As low as S$1,000 with proper sizing. Micro futures (MGC): S$2,000-5,000. Standard futures (GC): S$10,000+. Start with smaller vehicles and size conservatively.
Formula: Position Size = Risk Amount / (ATR × Multiplier). Example: S$500 risk, $15 ATR, 2.0 multiplier = S$500 / $30 = ~17 oz. Adjust contract size accordingly.
Generally avoid counter-trend breakouts as they have lower probability. If you do, use tighter targets and smaller size. Most profits come from with-trend breakouts.
Gold trades nearly 24 hours so gaps are less common. Use mental or broker stops. Consider reducing size for overnight positions. Be aware of Asian session reversals.
Breakout typically refers to upside (above resistance). Breakdown refers to downside (below support). The strategy works both directions with appropriate trend filters.
Use ATR-based trailing: Once in profit by 1× ATR, move stop to breakeven. Once 2× ATR profit, trail stop 2× ATR below highest high (for longs). Adjust as price moves.
Gold and DXY are inversely correlated. For long gold breakouts, confirm DXY is weak/breaking down. For short gold, confirm DXY is strong/breaking out. Divergence = caution.
Real interest rates (negative correlation), USD strength (negative), inflation expectations (positive), geopolitical risk (positive), central bank demand. Major breakouts often align with fundamental shifts.
Options: (1) Flatten before announcement, (2) Reduce size and widen stops, (3) Wait for post-announcement breakout after initial volatility settles. Don't hold full size through major Fed events.
Enter 50% on initial breakout signal. Add 25% on first pullback that holds above breakout level. Add final 25% on continuation above recent high. Alternatively: 50% initial, 50% on confirmation.
Gold often has low/negative correlation to equities, providing diversification. However, in liquidity crises, correlations can spike. Track your overall risk exposure; don't assume gold will always hedge.
Full guided lessons, quizzes, and a complete strategy library for the Singapore market. One-time purchase. No subscription, ever.
Get Singapore access →