Creating a XAGUSD Trading System: Trading Indicator Based XAGUSD Trading System

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

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

• RSI indicator
• MACD indicator
• Moving Averages indicators

Example - MT4 Template Trading System Example

Creating a Silver Trading System - Silver System Template Examples

So the question is how can a trader come up with silver trading systems that work like the xagusd trading system example above and how does one write it's trading rules? to write the silver trading system 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 Time-Frame

This first step depends on how many hours you want to dedicate to silver trading. Whether you prefer sitting in front of the Desktop computer constantly for several hours interpreting short silver chart time frames OR you prefer setting up your silver 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.

Silver Trading Chart Time Frames on MT4 Platform

While testing your new silver 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 silver trend

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

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

Moving Average Crossover Method

Sell silver signal and Buy silver signal Generated by Moving Average Crossover Silver Trading Method

3. Choose additional indicators to confirm the silver trend

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

To confirm the silver signals we use RSI indicator and Stochastic Oscillator indicator.

RSI XAGUSD Indicator and Stochastic Indicator Trading System

4. Finding xagusd trading entry and xagusd trading exit points

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

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

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

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

Generating Silver 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 silver trading tools that help to set profit goals like Fibonacci expansion tool or set a protective stop loss depending on the silver market volatility at any given time. Alternatively a trader can exit when the indicators give an opposite trading signal.

When opening a new trade transaction it is 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 silver system in the globe, losses are inevitable and therefore being ready to tell where you will give up and cut your losses before starting a silver trade is very important.

5. Calculate risks in each XAGUSD trade setup

In Silver, 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:

Silver 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 a profit of $10,000. Interpret more on this silver trading money management silver trading topic: Here Silver Trading Money Management Rules - MT4 Template Trading System and Silver Money Management Methods - Template Trading System Example.

Before opening a new silver trade, a trader should define the point at which they will close the silver trade if it turns to be a losing silver 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 silver orders once they have opened a silver trade transaction.

6. Write down the systems silver rules and follow them

A Silver 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 silver rules then you don't even have a silver trading system in the first place.

The next silver systems lesson shows you an example of how to use above steps to come up with your own Silver online silver trading system:

Next Lesson: Examples of Writing Silver Trade Systems Rules

7. Practice on a Practice Account

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

Once you have your silver trading system rules written, it is time to test and improve your trade system by using it on a demo practice account.

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

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

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