Coming Up with a Simple Strategy

For any trader wanting to be profitable in the long term gold trading 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 trading systems that will have many trading rules that are hard to follow when market & 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 that are hard to follow when trading the fast moving market of trading.

Many beginner traders try to come up with complicated trading systems that use many different indicators to analyze the market. Instead of using 2 or 3 technical indicator to create their trading indicator based method traders will use five or more technical indicators which make their system very complex. 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 may 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 trading method. Instead a gold trader should try and create a trading system that will identify trends early enough & at the same time have a way of validating these trading signals so that to eliminate whipsaws. As long as a trade 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's 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 trading indicators is very high, henceforth meaning that instead of getting the confirmation signal that a trader is looking for a trader might get more confusion instead.

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 when trading.

The first thing which a trader needs to determine before opening any trade is the trend of the market. The trend of a market is the overall direction that the market is heading towards. When market prices starts to move in one direction it will keep moving 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 gold. In general traders will find it is to make money when the market moves up and 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 moving up or down before deciding to trade. If the market is moving up a trader can open trades in that direction & if the market is moving down a xauusd trader then can open trade positions in that direction. But if the market is not heading in any particular direction & the prices are consolidating then a gold trader should not open any trades and should stay on the sidelines.

After determining if there is a market trend or not a xauusd trader can then use their system to detect 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 on is determining the current 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 site. Traders wanting to learn these strategies can navigate to trading strategies section & 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 xauusd 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.

Learn More Tutorials and Topics:

Trade Gold Trading

Coming Up with a Simple Strategy