MetaTrader 4 Template XAUUSD System

A XAUUSD System refers to a set of xauusd rules that you follow to manage your trades. These written xauusd rules will determine when you open a xauusd trade & when you will exit. A xauusd 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 xauusd system. For this example - stochastic oscillator can be combined with the technical indicators below to come up with the following xauusd system.

• RSI indicator
• MACD indicator
• Moving Averages indicators

Example - MetaTrader 4 Template XAUUSD System Example

Creating a XAUUSD System - XAUUSD System Trading Example

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

Seven steps to creating an technical indicator based trading system

To come up with these set of xauusd 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 xauusd. Whether you prefer sitting in front of the computer constantly for several hours analyzing short xauusd chart timeframes OR you prefer setting up your xauusd charts using bigger chart timeframes once or twice a day. Choosing a chart timeframe will mainly depend on what type of trader you are.

Chart Time Frames on MT4 Software

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

2. Choose indicators to identify a new xauusd trend

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

One of the common ways to spot a new xauusd trend as fast as possible is to use Moving Averages Indicator. A simple 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 xauusd signal & Buy xauusd trading signal Generated by Moving Average Crossover XAUUSD Method

3. Choose additional indicators to confirm the xauusd trend

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

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

RSI Gold Indicator & Stochastic Oscillator XAUUSD Indicator System

4. Finding entry and exit points

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

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

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

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

Generating XAUUSD Signals - how to Generate XAUUSD Signals.

Generating Trade Signals

For exits, a trader can either set an amount that wants to earn per trade or use technical 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 indicators give an opposite trading signal.

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

5. Calculate risks in each XAUUSD trade setup

In XAUUSD, 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 to Reward Chart below shows you how:

Gold Money Management Reward Risk Chart - Example Template XAUUSD System

In the first examples of Risk to Reward Ratio, you can see that even if your xauusd system only won 50% of your trades, you would still make profit of $10,000. Read more on this xauusd money management xauusd topic: Here Gold Money Management Guidelines - MetaTrader 4 Template XAUUSD System and Gold Money Management Methods - Template XAUUSD System Example.

Before opening a new xauusd trade, a trader should define the point at which they will close the xauusd trade if it turns to be a losing xauusd 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 xauusd trading trade transaction.

6. Write down the xauusd systems xauusd rules and follow them

A XAUUSD 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 xauusd rules then you don't even have a xauusd system in the first place.

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

Next Lesson: Examples of Writing XAUUSD 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 xauusd trading system rules written, it is time to test and improve your trade system by using it on a practice account.

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

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

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