This content explains how traders can leverage geopolitical tensions, specifically the situation in Venezuela, to identify profitable trading opportunities, particularly in safe-haven assets like gold.
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Hey guys, welcome to a new video and
also happy new year. So in this video
I'm going to be explaining how you can
use geopolitical tensions in your
trading, right? More specifically, I'm
going to break down what's actually
going on in Venezuela at the moment and
how you can use this information to
trade. Right? If you know how to do
this, you know how to interpret this
information. It can be extremely
extremely profitable. This is the trade
right here. Obviously, it's on gold XUSD
and let's get into it. Okay, so first we
got to start with geopolitical tensions,
right? What is this? What does it even
mean? So we can think of it as conflicts
between countries and regions that come
from geographical, economic and/or
political interests. Okay. So in the
situation at the moment with Venezuela,
I'm sure you've seen it online. Um it's
a big deal, right? So basically in
Karakas, which is the capital of
Venezuela, um the US has captured
Nicholas Maduro, the president, right?
And this is like I've just said a very
very serious event and it's going to
cause a rise in geopolitical tensions.
Right? This is going to, you know,
further destabilize the reason the
region. Um I don't want to get too much
into it but you know there's a lot of
oil there a lot of money a lot of a lot
of serious things that can happen now
because of this um it's going to create
a lot of uncertainty and when we have
uncertainty in the markets it's going to
push a lot of money into hard assets
right now one of those hard assets being
gold right the trend for banks um
recently uh not actually quite a while
now um has been for banks to buy gold
right before they were just trading a
lot uh a lot of gold but now they're
actually buying a lot of gold right
because the world is trying to almost
you call DD dollarized, right? They're
trying to um reduce their dependence on
using the US dollar because it's uh seen
as not as secure anymore, right? Gold is
seen as as much more secure at the
moment than the dollar, right? The gold
is also um overtaken the dollar as a
leading reserve asset for central banks,
right? This is also very very big deal,
right? Again, you know, hard assets such
as silver. I'm actually in a trade um as
silver as well. Um actually open right
now, but obviously this trade is on
gold, so I'm just going to explain uh
the gold trade. Okay, so basically this
is what's happening in Venezuela. Very,
very big deal. Now, what does this mean
for us traders? Okay, so this is going
to cause a rise in geopolitical
tensions, right? Like I've just
mentioned here and basically when we see
a rise in geopolitical tensions, we're
typically going to see safe haven assets
rise. Okay, so for example, some of the
safe haven currencies, we have the US
dollar, we have the Swiss Frank, the
Japanese yen, and then for example, a
metal, which in this case what what I
traded was was gold, right? But again,
we have, you know, silver and many many
other things, but I just haven't listed
them here, right? So now the reason for
this obviously is because investors want
to hold their money in safer places,
right? Very very stranded, very very
kind of straightforward. Okay. Now with
gold um I'm expecting gold strength
based off this. Right? Now you have to
also I'm going I put note here cuz I
want to break something down really
quickly which is some people get caught
out on is gold is obviously um XAU
USD. Right? So we have the gold portion
here. Then we have the US dollar portion
here. Now in this situation I have
obviously see typically see safe haven
assets rise. I have the dollar and I
also have gold. So basically what I'm
saying here is is I want to see is I'm
potentially going to see gold rise and
the dollar rise. Now if these both rise
the chart is not going to move at all.
Right? Because they're both rising. You
can think of it almost like they cancel
each other out. Now, in this situation,
the reason why I wanted to see gold, I'm
expecting gold strength was because down
here, what I'm talking about is, you
know, the trend is people are trying to
deolize is that I'm expecting more
strength in um in gold as opposed to the
dollar, right? I'm still expecting
strength in both, but I'm expecting more
strength in in gold to actually get this
movement up, right? So, if they're both
the exact same, we're basically just
going to have some really really
sideways price action. Not going to see
much movement, right? But if the gold is
getting a lot a lot stronger than the US
dollar is, we are going to see obviously
gold gain strength. Right? So you have
to be careful in some situations where
obviously we do have kind of safe haven
safe havens rise like an event that
causes safe havens to rise. Um you may
not actually see gold rise, right?
Because the dollar is rising alongside
it, right? But in this situation because
of what I'm explaining down here with
gold's overtaking the dollar, I'm really
expecting gold to have more strength
than the dollar, right? Obviously
causing gold to to gain strength, right?
So, hope that makes sense. Again, if you
have any questions, just drop them in
the comments. Right? So, that's
basically what I'm expecting, right? I'm
expecting gold to gain strength. And
now, before I'm actually entering any
trades, I need to I need my technicals
to line up, right? Technical analysis
super super important for me. I want to
see a clear break of structure and I
want to see the currency reacting as
I've expected. Okay? So, in this
situation, I'm going to jump on the
charts in just a second, but like I
said, I want to see a breakup structure,
whether we have a structure point,
breakup structure right here. I want to
buy and then also want to see currency
moving in the way that I'm expecting.
Right? For example, if if I just jump
onto the charts and gold is suddenly
moving down, then I'm not going to enter
the trade, right? Because that's not
what I'm expecting, right? I like to
think of it as the technicals tell me
when and then the fundamentals tell me
why. Okay, so let's get into let's get
into the charts so I can show you
exactly what I'm doing and yeah, let's
get into it. Okay, so first things first
with um with my technicals, I'm just
going to mark off my clear zones. I've
done this in previous videos. Again,
very straightforward. I want to find off
zones that are most likely going to get
respected. Okay. Now, in terms of the
actual situation with Venezuela, that
happened over the weekend, right? So, um
obviously that's why we have this gap
here. When the market opened, we
obviously gapped up quite a bit. Okay.
So, over the weekend, uh when this when
this obviously happened, I'm researching
as much as I can and I'm looking into
it, which I explained previously, right?
I I broke it down. I'm expecting gold
strength. So, when the market opens, I
want to see gold strength, right? We can
see that when we do get this open, we do
get this immediate strength, but I
didn't enter right off here. Okay?
because again this kind of comes from
experience doing it again and again. Um
sometimes when we have an event like
this we can see a quick spike up and
then a really really big retracement.
Okay. So this uh kind of immediate
strength straight away wasn't enough for
me to enter. I wanted to see a kind of a
break of structure to confirm that this
is the direction that we actually want
to go into. Okay. So again we push up. I
didn't enter here. We get a small little
pullback. Um and then again we push
straight up. Break this structure point
right here. And that is enough for me to
enter the trade. Right. We've had our
initial jump. We've retraced and we're
continuing to move in the direction.
We're breaking structure in the
direction that I want to see. That's
enough for me to enter. Right. I place
my stop loss below this uh candle right
here, this wick, and um basically just
let it ride. Right? This is not a super
super um uh technical trade, right?
These are this was very very much uh
based off fundamental reasons. When you
understand how to use this information,
you can, you know, catch trades like
this. This was kind of very very
straightforward trade for me and these
trades can be yeah super super
profitable. Um so yeah basically entered
here stop loss below and I'm obviously
targeting these highs up here. I have so
this actually red line I should mention
here. I think I forgot to mention my
last video. This red line mentions my
trading stop loss. So I don't like to
keep my stop loss um just all the way at
the bottom. If I'm in a certain amount
of profit and if I can see structure,
you can see the structure point right
here. There's no reason for this for me
to you know let this trade run all the
way back and hit my stop loss. Right?
I'm in a certain amount of profit. I
want to secure a certain amount. Okay.
Now, this green line does represent uh
my take profit. In this situation, I
have taken out uh have taken partial.
So, I've taken out a decent chunk of my
profits, but I am actually continually
holding this as you can see. Um and I
want to see if we can hit all the way up
here. So, this is kind of how important
it is and how kind of profitable it can
be to understand what's actually
happening in the markets, what's
actually happening in the world. And you
know, this year there's going to be
there's going to be so much happening.
Um, so if you know how to read this
information, how to understand this
information, you are going to be um,
yeah, very very profitable, making a lot
of money if you know how to do this,
right? So yeah, I hope this was uh
helpful. I hope you found this uh,
informative. I hope this was, yeah,
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