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 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 two or three indicator to come up with their indicator based method traders will use five or more 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 indicators some indicator may give opposite signals at the same time therefore confusing the trader even more on what direction of trade they should take when opening a trade.

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 trader should try and come up with a system that will identify trends early enough and at the same time have a way of validating these signals so as to eliminate whipsaws. As long as a system can accomplish this then the system will give good signals most of the time. But instead most traders want to put more & more indicators on their systems to confirm a signal that's generated when only one indicator is required to confirm the signal. By putting too many indicators a trader can get conflicting signals because the chance of one indicator giving an opposite signal to other indicators is very high, therefore 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 general direction that the market is moving towards. When trading prices starts to move in one direction it will keep moving in that direction for some time because of the momentum that the direction will have. This momentum will result in a market 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 and if the market is moving down a trader can then open trades in that direction. But if the market is not moving in any particular direction and the prices are consolidating then a trader should not open any trades and should stay on the sidelines.

After determining if there is a trend or not a trader can then use their system to detect when to open a trade.

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 and this is what will determine the profitability of the strategy that a trader is using.

There are many technique of determining a trend most of which are covered in this site on the strategies section of this site. traders wanting to learn these strategies can navigate to trading strategies section and do more research on which strategies are used to determine market trends.

After researching and deciding which technique or strategy is best for them a 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 market.