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