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