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 strategy will have simple rules that will be easier to follow when the online trading 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 method traders will use five or more technical indicators which make their system very complicated. Generating signals will mean waiting for the five indicators to give the same signal and sometimes because there are too many trading indicators some technical indicator might give opposite signals at the same time thence confusing the trader even more on what direction of trade they should take when opening a trade position.

Because the market is a fast moving market and the market moves are volatile it is best that traders do not trade with a very complicated method. Instead a xauusd trader should try & come up with a system that will identify trends early enough and at the same time have a way of validating these trading signals so that to eliminate whipsaws. As long as a system can accomplish this then the trade system will give good signals most of the time. But instead most traders want to put more and more technical indicators on their systems to confirm a signal that is generated when only one technical indicator is required to confirm the signal. By putting too many indicators a xauusd trader can get conflicting signals because the chance of one technical indicator giving an opposite signal to other technical 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 it is best as a trader to create a simple trading 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 that the market is heading towards. When trading prices starts to move in one direction it'll keep heading in that particular direction for some time because of the momentum that the direction will have. This momentum 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 to make money if the market is moving 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 transactions in that particular direction. But if the market isn't heading in any particular direction and the prices are consolidating then a xauusd trader should not open any trades & 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 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 market trend is up or down and this is what will determine the profitability of the trade strategy which a xauusd 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. XAUUSD traders wanting to learn these strategies can go to xauusd strategies section and do more research on which strategies are used to determine price trends.

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

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Coming Up with a Simple Strategy