Gold Trend Following
A trader must come up with a gold trading strategy that they stick to when trading the online gold market. A trader must have the discipline to follow the rules of their gold trading strategy at all times. That's why it is better to come up with trading strategies that are profitable - profitable gold systems will be a lot easier to follow and stick to. This is because a trader knows that by following the rules of their gold system they will be successful.
A carefully designed trading strategy that has been back-tested and proven to produce profitable results is one of the keys to becoming successful when trading the gold trading market. This type of strategy will make it easier for the trader to follow the rules of their gold trading strategy because they already know that the trading strategy is profitable, therefore maintaining the discipline to continue following the gold trading system will be much easier.
Successful gold trading strategies will also include:
1. Gold trading money management guidelines
2.Gold Trading Psychology Mindset
These 2 will greatly improve the success of any xauusd trading system.
However, Let us look at xauusd price action strategy before explaining more about gold money management and gold trading psychology.
XAUUSD Trend Following Strategies
Gold Trend following strategies are based on first of all determining the overall market trend, whether the xauusd market is moving upwards or it is moving downwards. After determining the xauusd market trend the trader will then only open trades in one direction.
Upward gold trend - in an upwards gold trend xauusd prices keep moving up, and here the trader will keep opening buy xauusd trades.
Downward gold trend - in a downward trend xauusd prices keep moving down, and here the trader will keep opening sell xauusd trades.
There are various strategies of determining the xauusd market trends and the two most popular ones are:
Gold Trend lines - traders will draw gold trend line on the xauusd price chart to determine the current general market movement. Once the gold trend direction is determine a trader will then open xauusd trades once the xauusd price touches the trend line or when price is close to the trend line. The trader will only open trades in the direction of the trend.
When markets form trends, the gold trend will have a lot of momentum and this momentum will mean that the xauusd prices will keep moving in that direction for a period of time that lasts for quite some time.
Trading the gold trend is one of the most profitable way to trade the xauusd market if a trader catches a gold trend that has already formed they can make a lot profit just by trading in the direction of the trend and the longer the gold trend stays the longer a trader can continue to make profits. Some major gold trend might last for years & these can prove to be the most profitable trading setups especially when they last for years.
Moving Averages Strategies - Another gold trend identification strategy is the use of the 20 day moving average, and when prices are above this moving average the xauusd market is bullish and if xauusd prices are below this moving average the xauusd market is bearish.
The 50 day moving average is also used for determining the medium term gold trend, while the 200 day moving average is used to determine the long term gold trend of the xauusd trading market.
Traders can also use two moving averages to form the moving average cross-over method, this technique will have a shorter period moving average and a longer term moving average and these two will be use to determine the current market trend. For example a trader can use the 5 day and 7 day moving averages, & for this strategy the gold trend is upward if both these moving averages are heading in the upwards direction & the gold trend will be down if both these 2 moving averages are heading downwards.
This system will indicate the gold trend is about to change one these 2 line cross over each other. This signal will be a god time to close trades if a trader has open trades.
XAUUSD Trading Strategies Tips
Once a trader has come up with their gold trading strategy, they should also include the following so as to make their gold trading strategy more successful.
1.Gold Trading Money Management Rules
2.Gold Trading Psychology
Gold Trading Money Management Rules
Gold trading money management guide-lines should be part of your gold trading strategy - these rules will help you as a trader to manage risk. This means that you'll use two rules of gold money management - these are risk:reward ratio & draw down reducing technique when placing your xauusd trades to determine lot size that you will open in the gold trading market. The most popular gold trading money management rule use in xauusd trading and one that you should also add to your trading plan is rule that says a trader should never risk more than 2% of their account balance on any one single xauusd trade transaction.
To learn more about these two gold trading money management guidelines, traders should read the gold trading money management course that is on the learn gold trading lessons section of this web site under the gold trading key concepts lessons.
XAUUSD Trading Psychology Mindset
In order to become successful when trading the xauusd market a trader has to learn about gold trading psychology. The gold trading psychology or mindset that is required to become successful in gold trading is one that avoids the emotions of fear & greed while trading the xauusd market & is a mindset of total discipline that a trader will follow all their rules & their gold strategy & only trade with trading signals which are generated by their gold trading strategy. With discipline a trader will not trade unless their gold strategy gives a trading signal. A trader will have the mindset of only following their trading system 100% all the time without second guessing the xauusd trading system. A disciplined trader will also not place trades in the xauusd market just because the xauusd market has started to move upwards or downward, instead a trader will wait for a signal to trade to be generated by their gold trading strategy.
In order to learn more about gold trading psychology & how to manage emotions while trading the online gold market a trader can read the gold trading psychology lessons from the learn gold trading lessons section of this web site under the gold key concepts courses.
