Coming Up with a Simple Strategy

For any trader wanting to be profitable in the long term trading xauusd the best way to do this is to come up with a simple strategy to follow when trading the market. A simple trading strategy will have simple trading rules that will be easier to follow when tradiing the online market.

Many traders will use complex systems that will have many xauusd rules that are hard to follow when trading market and at some point these traders realize that these complicated systems and methods are not the best when it comes to trading with them in the market because these systems have complicated rules that are hard to follow when trading the fast moving market of xauusd.

Many beginner traders try to come up with complicated systems that use many different indicators to analyze the market. Instead of using 2 or 3 technical indicator to create their technical indicator based trading method traders will use 5 or more indicators which make their trade system very complicated. Generating signals will mean waiting for the five indicators to give the same signal & sometimes because there are too many indicators some indicator might give in the opposite trend signals at the same time thence confusing the trader even more on what direction of the trade they should take when executing a position.

Because the market is a fast moving market and the market moves are volatile it is best that traders don't trade with a very complicated method. Instead a xauusd/gold trader should try & come up with a system which will identify trends early enough and at the same time have a method of validating these trading signals so that to eliminate whipsaws. As long as a system can accomplish this then the trading system will give good trading signals most of the times. But instead most traders want to put more and more indicators on their trade system to confirm a trading signal that is derived & generated when only one indicator is required to confirm the signal. By putting too many indicators a xauusd/gold trader can get conflicting trading signals because the chance of one indicator giving an in the opposite trend signal to other indicators is very high, henceforth meaning that instead of getting the confirmation signal that a trader is looking for a trader may get more confusion instead.

For this reason/explanation it is best as a trader to create a simple strategy with fewer rules which will be easier to follow when trading.

The first thing which a trader needs to determine before opening any trade is the market trend of the market. The trend of a market is the overall direction which the market is moving towards. When prices starts and begins to move in one direction it'll keep heading in that particular direction for quite a while due to and because of the strength that the direction will have. This strength will result in a trend. The trend is the most reliable method that can be used to trade xauusd. In general traders will find it is to make money when the market moves up & also when the market moves down, but they will find it very hard and difficult to make money if the market is moving to nowhere.

What this means is that traders should first determine if the market is heading up or down before deciding to trade. If the market is moving up a trader can open trades in that direction and if the market is heading down a gold trader can then open trade positions in that particular direction. But if the market isn't heading in any particular direction and the prices are consolidating then a xauusd/gold trader should not open any trade positions and should stay on the sidelines.

After determining if there is a trend or not a trader can then use their system to determine when to open a trade.

The trading system should thenceforth not be too complicated to follow its rules.

The task that traders should focus on is determining the current market trend whether the trend is upward or downward and this is what will determine profitability of the trade strategy which a xauusd/gold trader is using.

There are many method of determining a trend most of that are covered in this site on the strategies section of this website. XAU USD traders wanting to learn these strategies can go to xauusd strategies section and do more research on which trading strategies are used to determine price trends.

After researching and deciding which method or trading strategy is best for them a gold trader can then use that strategy to come up with their own simple method or system which has simple rules that will be easy to follow when trading the online gold market.

More Courses & Courses:

Trade Forex Trading

Coming Up with a Simple Strategy