Trade Gold Trading

Trend Following

One must come up with a trading system which they stick to and follow when trading the online trading market. One must have the discipline to stick to the trade strategy at all times. That's why it is better to come up with strategies that are simple - profitable systems will be a lot easier to follow & stick to. This is because one knows that by following the rules of their system they'll be successful.

A carefully designed strategy that has been back-tested and proven to produce profitable results is one of the keys to becoming successful when trading the market. This type of trade strategy will make it easier for the trader to follow the guide-lines of their strategy because they already know that the trade strategy is profitable, therefore maintaining the discipline required to continue following the trade system will be much easier.

Successful strategies also will include:

1. Gold equity management guidelines

2.Trade Psychology Mindset

The two will greatly improve the success of any system.

However, Let us look at price action strategy before explaining more about money management and gold psychology.

XAUUSD Trend Following Strategies

Trend following strategies are based on first of all determining the overall price trend, whether the market is moving upwards or it's heading downward. After determining the price trend the trader will then only open trade positions in one direction.

Upward trend - in an upwards trend prices keep heading up, & here the trader will keep opening buy trades.

Downward trend - in a downwards trend prices keep heading down, & here the trader will keep opening sell trades.

The various strategies of determining the market trends and the two most popular ones are:

Trend lines - traders will draw trend line on the price chart to determine the current general market movement. Once the trend direction is determine a gold trader will then open trade positions once the price touches the trend line or when price is close to the trend line. The trader will only open trades in the direction of the trend.

When markets form trends, the market trend will have a lot of momentum & this momentum will mean that the prices will keep heading in that direction for a period of time that lasts for quite a while.

Trading the market trend is one of the most lucrative way to trade the market if a xauusd trader catches a market trend that has already formed they can make a lot profit just by trading in the direction of the market trend & the longer the market trend stays the longer a gold trader can continue to make profits. Some major trend might last for years & these can prove to be the most lucrative setups especially when they last for years.

MAs Strategies - Another trend identification strategy is the use of the 20 day MA, and when prices are above this moving average the market is bullish and if prices are below this MA the market is bearish.

The 50 day moving average is also used for determining the medium term trend, while the 200 day MA is used to determine the long-term trend of the market.

Traders also can use two MAs to form the moving average MA crossover strategy, this technique will have a shorter period moving average & a longer-term moving average MA and these two will be use to determine ruling trend. For example a trader can use the 5 day & 7 day moving averages, & for this strategy the trend is upward if both these moving averages are heading in the upwards direction & the trend will be down if both these 2 moving averages are heading downwards.

This system will indicate the market trend is about to change one these two line cross-over each other. This signal will be a god time to close trades if a xauusd trader has open trade positions.

Gold Strategies Tips

Once a trader has create their trade strategy, they should also try to include the following to make their strategy more successful.

1.Trade Money Management Guidelines

2.Trade Psychology

Trade Money Management Guide-lines

Gold money management guidelines should be part of your strategy - the rules will help you to manage risk. This means that you'll use two rules of money management - these are risk:reward ratio & draw down reducing technique when placing your trades to determine lot size that you will open in the market. The most popular equity management rule use in xauusd and one that you should also add to your plan is rule that says a gold trader should never risk more than 2% of their account balance on any one single trade.

To learn more about these two gold money management guidelines, traders should read the trading money management course that is on the learn gold lessons section of this web site under the trading key concepts lessons.

XAUUSD Trade Psychology Mindset

In order for one to become successful when trading the market a xauusd trader has to learn about psychology. The psychology or mindset that's needed to become successful in gold trading is one that avoids the emotions of fear & greed while trading the market and is a mindset of total discipline that a trader will follow all their rules and their strategy and only trade with signals which are generated by their strategy. With discipline one will not trade unless their strategy gives a signal. One will have the mindset of only following their system 100 percentage% all the time without second guessing the trade system. A disciplined trader will also not place trades in the market just because the market has started to move upwards or downward, instead one will wait for a trade signal to be generated by their strategy.

In order to learn more about psychology and how to manage emotions while trading the online market a trader can read the psychology lessons from the learn gold lessons section of this web site under the key concepts courses.

Study More Courses & Tutorials:

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