How to generate Signals for XAU USD
As a trader one of the lessons you as a gold trader must learn in trading the market is how to generate signals. A signal is just a set of rules that show when to buy or when to sell a xauusd.
For example, the simplest xauusd/gold system is the moving average crossover trading system which generates signals once 2 MAs crossover each other.
- Buy trade signal - MAs cross-over pointing upwards
- Sell signal - moving averages crossover pointing downwards
Trading System
To confirm the signals generated a trader will need to come up with a xauusd system & a set of rules for this gold system.
A trade system is a combination of 2 or more indicators & a set of written rules which are used to generate these trading signals with.
From the above trade system a gold trader can generate signals using the trade transaction rules below
Buy signal
- Both MAs pointing upwards
- RSI above 50
- Both Stochastics heading upward
Sell signal
- Both MAs pointing downwards
- RSI below 50
- Both Stochastics moving downwards
An exit signal is derived & generated when the Moving averages gives an in the opposite trend signal or RSI indicator give an in the opposite trend trade signal: A signal in the opposite market direction.
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