Coming Up with a Simple Trading System

For any trader who wants to be profitable in the long term gold trading the best way to do this is to create a simple strategy to follow & adhere to when trading the market. A simple strategy will have simple rules that will be easier to follow & adhere to when trading the online trading market.

Most traders will use complex trading systems that will have a lot of trade rules which are hard to follow & adhere to when market and at some point these traders realize that these complicated trading systems & techniques are not the best when it comes to trading with them in the market because these systems have complicated rules which are hard to follow & adhere to when trading the fast moving markets.

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

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

For this reason it is best as a trader to come up with a simple strategy with fewer rules which will be easier to follow & adhere to when trading.

The first thing which one needs to identify before opening any trade is the trend of the price. The trend of a market is the general direction which the market is heading towards. When market prices starts and begins to move in one direction it will keep moving in that given direction for quite a period of time because of the power which the direction will have. This momentum will result in a trend. The trend is the most reliable method that can be used to trade gold. In general traders will find it's to make money when the market moves up and also when the market moves & heads downward, but they'll find it very hard and difficult to make money if the market is moving to nowhere.

What this means is that traders should first of all determine & figure out if the market is moving up or down before making a decision to trade. If the market is moving up a trader can open trades in that direction & if the market is moving down a gold trader then can open positions in that direction. But if the market is not heading in any particular direction and the prices are consolidating then a gold trader should not open any trade positions and should stay on the sidelines.

After figuring out if there is a market trend or not a gold trader can then use their strategy to analyze when to open a trade position.

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

The task that traders should focus & concentrate on is determining the present market trend whether the market trend is up or down & this is what will determine the profitability of the trade strategy that a gold trader is using.

There are many technique of determining a trend most of which are covered in this website on the trade strategies section of this web-site. Traders wanting to learn these strategies can navigate to trading strategies section & do more research on which strategies are used to identify price trends.

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

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Coming Up with a Simple Trading System