Price Action Strategies
A trader must create a strategy which they follow when trading the market. A trader must have the discipline to s broken then the sentiment of the strategy at all times. That's why it's better to come up with trade strategies that are profitable - profitable systems will be a lot easier to follow and stick to. This is because one knows that by following the rules of their system they will be successful.
A carefully designed strategy which has been back tested and proven to produce profitable results is one of the keys of becoming successful when trading the market. This type of strategy will make it easier for the trader to follow the guide-lines of their strategy because they already know that the strategy is profitable, hence keeping up the discipline to continue following the strategy will be much easier.
Successful trade strategies will also include:
1. Gold trading money management rules
2.Gold Psychology Mindset
These two will greatly improve the success of any system.
However, Let us look at price action strategy before narrating on money management & gold psychology.
Price Action Strategies
Price action is the use of price movements to determine when to buy or close trades. Price action will use the study of patterns that form time and time again & these chart patterns can be interpreted in different ways. The trader will use this pattern to determine the likely market direction that the market is likely to take next based on the price chart patterns that have been formed on the charts.
In price action traders may use different methods to generate signals from the chart setups. Some of these techniques are:
Candles trading chart patterns - a trader may use the study of Japanese candlestick chart formations which is the study of various candlestick formations along with how to interpret these candlesticks formations. A candlestick pattern may consist of only one candlestick or a multiple of candles. To learn more about candlesticks patterns traders can find these candlestick chart patterns tutorials on the learn lessons of this web site under the analysis concepts.
Support and Resistance Levels - traders can use price action and combine this trading price action with support and resistance levels. A trader will wait for price to hit the support level to open a buy trade & wait for the price to touch the resistance level to open a sell trade. The concept of trading major support and resistance levels is a very popular method in gold. For example in a upwards trend a trader may wait & only open buy traders when prices hit support levels - at the same time a trader will take profit once the price hits a resistance level and then wait for another pullback to open a buy trade again.
To learn more about support and resistance levels traders can find these tutorials on the learn lessons of this web site under the analysis concepts.
Trend lines - traders also can use trend lines to determine price action direction or the market trend. For an upward gold trend line that shows the market is trending up a trader will open buy trades once price touches the upwards trend line. For a downward gold trend that shows the general market direction is downwards a trader will open sell trades once the price touches the downwards gold trend line.
To learn more about how to trade with trend lines traders can find these tutorials on the learn lessons of this web site under the analysis concepts.
Patterns - chart patterns is different from candle patterns, these are two different methods of technical analysis, and traders should learn more about chart patterns in the courses section of this site under the technical analysis concepts.
Chart patterns is the study of a formation of several candlesticks over a period of time. These patterns are consolidation patterns, gold trend continuation patterns and market reversal patterns. Traders can use the study of these patterns to determine the next likely market move.
Trading Strategy Tips
Once one has come up with their strategy, they should also include the following so as to make their strategy more successful.
1.Gold Equity Management Rules
2.Gold Psychology
Gold Equity Management Rules
Gold trading money management guidelines should be part of your strategy - these rules will help you to manage risk. This means that you'll use the two rules of money management - these are risk : reward ratio & draw down reducing method when placing your trades to determine lot size that you'll open in the market. The most popular money management rule use in xauusd & the one that you should also add to your plan is the rule which says a trader should never risk more than 2% of their trading account balance on any one single trade.
To learn more about these two equity management principles, traders should study the trading money management course that is on the learn courses section of this site under the trading key concepts courses.
Trade Psychology Mindset
In order for one to become successful when trading the market one has to learn about psychology. The psychology or mindset that is required to become successful in gold trading is one that avoids the emotions of fear and greed while trading the market & is a mindset of total discipline that one will follow all their rules & 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. A trader will have the mindset of only following their system 100 % all the time without second guessing the system. A disciplined trader will also not open trades in market just because the market has started to move upwards or downwards, 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 courses section of this site under the trading key concepts courses.
