Writing a Rule Based Strategy

A gold system is a set of trade rules which specify when to open and when to close out trade positions. To come up with a complete system a trader is also required to adhere and follow advanced rules that will guide his technique. The trading rules are also part of the system but cover a much wider approach of how a trader uses their system when opening and closing trade transactions.

Following things also will be included within the trade system which a gold trader will come up so as to make the system of a xauusd trader complete.

Mindset/XAUUSD Psychology

This section of the trader’s system will write down the mindset that a trader will follow when setting their trade positions using their strategy. Your mindset as a gold trader should specify that you will only follow the trading signals generated by your system and you'll not open trade positions just because the market has started to move up or move down. If a trade signal isn't generated by your system then you'll not place any trade on the trading market. The way you will make sure that you follow only your system is by using xauusd psychology to control your emotions in trading.

You should be prepared to be disciplined enough when trading to follow what your system is saying. You should never go against your system and base your decisions on what the market is doing. You should be objective when following the trade rules of your trading system. This will be a matter of training yourself to follow your system strategy even when you as a trader make a position that loses money you as a trader must follow your system and close out the trade at the specified level where your trading rules say the trade should be closed to avoid further losses. Close that trade & wait for another opportunity, there'll always be another opportunity to open a trade tomorrow, next week or next month you do not have to stay on one trade until you lose all you trading funds and after you miss the other opportunities that you'd have had.

You will also have to identify the best method for your personality so that you're comfortable with the types of trade that you place in market. For exemplification if you as a trader can execute trades quickly then you might choose to be a scalper, if on the other hand you are the type of trader that likes to take their time before making decisions then scalping may not be the best style method for you, instead you should become a day trader or a swing trader and that way you as a trader can have enough time between trade transactions to make a decision. By choosing a trade style that most suits your personality is the first thing you should do & after you have made the correct choice of the trading style method that most fits you then you'll have the right mindset when trading and you'll increase your chances of being more successful when trading the trading market.

Set Goals To Follow When Trading

You have to know what goal you want to achieve when it comes to and executing trade transactions with your system. Your goal may be that you as a trader want to follow your trading system all the time & never take any trade that isn't indicated by your system. Another goal may be that you as a trader want to be more disciplined when executing trade transactions by being disciplined and patient enough to wait for a trading signal to be generated by your trading system before opening a trade & that you will not jump the gun and open a position before the trade signal is generated. Sometimes a trader might see that a trading signal is about to be generated by their strategy but it hasn't been derived/generated in accordance to the trade rules of the trade system but a gold trader might decide to open a position before the signal & wait for the trade signal while they're in the market, this shouldn't be how a xauusd trader should trade, traders should learn and know to be patient enough to wait for the signal to be generated before opening a position.

Select and Choose one of the liquid XAU/USD To Trade

Traders should also specify the xauusd that they will be trading with their system. A trader may come up with a system which has got a strategy that is best fitted for trading some xauusd only. The trader should therefore only trade with their strategy when they're trading only these price charts.

Most systems will produce best results when they are applied to trading one of the most liquid xauusd & hence a gold trader should make sure that they only trade those xauusd that are best fitted for their strategy. This is why traders should specify in their gold rules and the xauusd that they will be trading.

XAUUSD Money Management Tutorials

For a system to be very successful then a xauusd trader should make sure that they also specify the money management rules/guidelines that they'll always follow when trading the trading market.

The money management method that a trader uses should have a high risk:reward ratio so as to give the online trader more and greater chances of becoming profitable when trading with their strategy.

The equity management should outline and specify at what level a gold trader will closeout a losing position: the online trader should also ensure that they close all their losing trade transactions at this point.

A trader should also never risk more than 2% of their equity on 1 single trade.

The trader should also determine where they will always take-profit when their trade is profitable. The take-profit level should be 2 times the stoploss order level. For illustration is a gold trader is setting their stop loss orders at 25 pips then the traders should set their take-profits at 50 pips. This is what is known as a high risk reward ratio to trade with. This risk:reward ratio is 2:1, which means a xauusd trader can make 2 times profit the amount which they set as their loss. This way by using a high risk reward ratio means that a trader will be more successful in the long run because their method uses a high risk reward ratio that means they stand to make two times the amount that they set as their loss.

Keep a Trade Journal

Traders should always keep a journal and this journal will prove to be a very helpful trading tool when it comes to improving their system.

For example when a trader is designing their system and they want to test it out on the market, then the trading journal will prove to be a very helpful tool to help them do this. This because while testing out the system traders will record all their trade positions on this journal & after a while they can use this trading journal to review their trade transactions, traders can find out why the losing trade positions made losses and determine what factors in their trade strategies are resulting in generating signals which make losses, the trader will then try not to make the same mistake while trading in the future. A trader will also try and find the patterns which help them to make profitable trades and the online traders can then use these patterns to trade with in the future so that they can improve the profitability of their strategy in the future & there help them to become more successful.

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