MT4 Template Trading System

A Gold System refers to a set of trading rules that you follow to manage your trades. These written gold trading rules will determine when you open a gold trade & when you'll exit. A gold trade system is created by combining two or more technical indicators.

For example, the Stochastic Oscillator indicator can be combined with other indicators to form a trading system. For this example - stochastic oscillator can be combined with the indicators below to come up with the following trading system.

• RSI indicator
• MACD indicator
• Moving Averages indicators

Examples - MT4 Template Trading System Example

Creating a Gold System - Gold Trading System Trading Example

So the question is how can a trader come up with gold trading systems that work like the xauusd trading system example above and how does one write it's trading rules? to write the gold system trading rules follow the steps below.

Seven steps to creating an technical indicator based trading system

To come up with these set of trading rules we use the following seven steps.

1. Choose your Chart Timeframe

This first step depends on how many hours you want to dedicate to gold trading. Whether you prefer sitting in front of the Desktop computer constantly for several hours analyzing short xauusd chart time frames OR you prefer setting up your gold charts using bigger chart time frames once or twice a day. Choosing a chart time frame will mainly depend on what type of trader you are.

Chart Time Frames on MT4 Software

While testing your new gold trading system you may want to find out about its performance on different chart time frames and then choose the most accurate & profitable chart time frame for you.

2. Choose indicators to identify a new trend

The goal of a trader is to get into the trade as early as possible and take maximum advantage of xauusd price moves.

One of the common ways to spot a new trend as fast as possible is to use Moving Averages Indicator. A simple trading strategy is to use a moving average crossover system that will identify a new trading opportunity at its earliest stage.

Moving Average Crossover Technique

Sell gold signal and Buy gold trading signal Generated by Moving Average Crossover Trading Method

3. Choose additional indicators to confirm the trend

Once we find a new trend we need to use additional indicators that will confirm the entry gold signals & give either a green light for action or save a trader from fake-outs.

To confirm the gold signals we use RSI indicator & Stochastic Oscillator indicator.

RSI XAUUSD Indicator and Stochastic Oscillator Gold Indicator System

4. Finding xauusd trading entry and xauusd trading exit points

Once indicators are chosen so that one indicator gives the trading signal and another indicator confirms the trading signal, it's time to enter a xauusd trade transaction.

A trader should enter a gold trade as soon as a gold signal is generated & confirmed after a candlestick closes.

Aggressive traders enter a trade transaction immediately without waiting for the current xauusd price bar to close.

Other traders wait until the current xauusd price bar is closed and then enter the trade transaction if the trade setup has not changed and the gold signal remains valid. This method is more considerate and prevents additional false entries and gold trading whipsaws.

Generating Gold Signals - how to Generate Trading Signals.

Generating Trade Signals

For exits, a trader can either set an amount the wants to earn per trade or use technical gold trading tools that help to set profit goals like Fibonacci expansion tool or set a protective stop loss depending on the xauusd market volatility at any given time. Alternatively a trader can exit when the technical indicators give an opposite trading signal.

When opening a new trade transaction it's always important to calculate in advance how much you are willing to lose if the trade goes against you. Although the goal is to create the best gold system in world, losses are inevitable & therefore being ready to tell where you'll give up & cut your losses before starting a gold trade is very important.

5. Calculate risks in each Gold trade setup

In Gold, you must calculate your risk for each trade. Serious traders will only enter & look to open an order if the risk to reward ratio is 2:1 or more.

If you use a high risk to reward ratio like 2:1, you significantly increase your chances of becoming profitable in the long run.

The Risk-Reward Chart below shows you how:

Gold Trading Money Management Reward Risk Chart - Example Template Trading System

In the first examples of Risk-:-Reward Ratio, you can see that even if your trading system only won 50% of your trades, you would still make profit of $10,000. Interpret more on this gold trading money management gold trading topic: Here Gold Trading Money Management Rules - MT4 Template Trading System and Gold Money Management Methods - Template Trading System Example.

Before opening a new gold trade, a trader should define the point at which they will close the gold trade if it turns to be a losing gold trade. Some traders use Fibonacci retracement levels tool and support and resistance levels. Other traders just use a pre-determined stop loss to set stop loss orders once they have opened a gold trade transaction.

6. Write down the gold trading systems rules & follow them

A Gold Trade System refers to a set of rules that you follow to manage your trades.

The keyword is A SET OF TRADING RULES which you must follow. If you do not follow the rules then you don't even have a gold trading system in the first place.

The next gold systems guide shows you an example of how to use above steps to come up with your own Gold online gold trading system:

Next Guide: Example of Writing Gold Trade Systems Rules

7. Practice on a Demo Account

Without enough trades, you will not be able to realize the true profitability of your trading system.

Once you have your gold trading system rules written, it's time to test & improve your trade system by using it on a practice account.

Open a free practice trading account & trade your gold trading system to see how well it will respond.

It is strongly recommended to begin with a practice xauusd account and practice for at-least for 1 or 2 months so as to gain some practice & experience how the xauusd market works.

Once you start making some decent profit on your demo xauusd trading account you can then try opening a live xauusd account & begin trading with real money.