Writing a Gold Trading Plan
In gold trading there is no single technique or formula that is used for trading the xauusd market successfully. The gold market requires traders to learn and acquire the skill required to trade the xauusd market successfully. Gold traders need to learn how to analyze the xauusd market movements. Gold traders then need to come up with a plan of how to come up with a way of combining this knowledge and the strategies they have learned so as to formulate their overall trading method.
By coming up with an effective trading plan your success will improve greatly. A gold trading plan will help you to effectively analyze the xauusd market and know when the best time to open a trade is and when it is best to close the trade.
Before starting to trade the gold trading you must be prepared with a gold trading plan. Just like in business where all successful businesses start with a business plan also successful gold traders must start with a gold trading plan.
Sections of a XAUUSD Trading Plan
Gold Chart
The first section of a gold trading plan will specify the trading instruments that a trader will be trading. Traders should specify the trading instruments which are best suited for their trading method.
Before deciding the most suitable trading instrument to trade a trader will have taken time to test their gold trading strategy on various gold charts on a demo practice after which they will choose the instrument that produces most profitable results. Trader will then list this trading instrument on the trading plan as the trading instrument that they trade.
Chart Time Frame
The trader will also have to specify the chart time frame they will be using to trade gold with. For example a trader may find that the best chart time frame for their trading system is the 15 min chart time frame and therefore they will specify their chart time frame as the 15 minutes chart time frame.
The chart time frame that a trader chooses will depend on the type of trader they are. For day traders who have a lot of time to watch the charts they can choose the 5 minutes or 15 minutes chart time frame and trade with these charts. For swing traders who do not have a lot of time to watch the xauusd market they can trade with the 1 hour xauusd chart time frame so that they can be able to follow the medium term trends that will last for a one or two days.
Gold scalpers on the other hand can trade with the 1 min chart time frame and trade the short term market moves. These traders will make many trades during the day and just like day traders they will also have a lot of time during the day to watch gold market moves.
Gold Trading System
This section will specify the gold trading system that the trader will be using to trade the gold trading market. This section will list the rules that a trader will follow when opening a buy or sell gold trade. It will also list the rule that a trader will follow when closing their trades - for example it will note the take profit levels as well as stop loss levels that a trader will set after they have opened a trade.
The trader will writedown if they will be using an technical indicator based trading system to generate gold trading signals or the trader will write if they will be using support and resistance levels to open & close trades or any other method that the trader will be using for trading. For examples a trader might specify that they will be using automated gold systems & they will write the parameters of the automated xauusd bots on this section.
Before writing the gold trading system that a trader will be using, the trader will have back tested this xauusd trading system on a practice practice account until the time that the xauusd trading system is producing profitable trades on a consistent basis and after coming up with a profitable gold trading system the trader will then write down the system on this section of their trading plan.
Mindset
This section will specify the mindset that you will be following when trading so as to ensure that you become successful when trading.
Discipline - This will list that you will be disciplined enough to follow the rules of your xauusd system and trading plan. Discipline will mean that you will be patient enough to wait for a trading signal from your gold trading system before opening a trade. This section will specify that you will only trade the signals that are generated by your xauusd system & you will not second guess your xauusd system & open trades not indicated by your trading system.
Trade Without Emotions - when it comes to trading the xauusd market you should not let the emotions of fear and greed control you when you’re trading. You should always trade based on the rule of your trading plan. Avoid becoming greedy and wanting more profit from the same trade instead of closing the trade at your take profit level.
Gold Trading Money Management
A trader must specify their gold trading money management guidelines that they will use when trading. For example a trader can specify that they will use a high risk: reward ratio which means they will place their take profit level at two times what they set their stop loss level. This will make their gold trading strategy more profitable in the long run because they stand to make more money from their winning trades and lose less money from their losing trades.
