Your trading edge

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In trading, it is possible to have an edge with specific strategies that might not be profitable in other contexts. It is essential to work on your strengths and specialise in the areas where you have the most advantage instead of trying a wide variety of strategies.

The key idea here is to do what you are doing well and avoid being average or worse at anything else.

While it is essential to try out new strategies, it’s not a good idea to pivot into something you are not particularly good at.

If you do have an edge and can perfect your strategy, you can exploit this in your trading in the long term.

A trader with a trading edge can produce excess profits over the long run, which ultimately matters in trading. To achieve this, however, you first need to locate and exploit your particular trading edge. So think about your skillset and what set of strategies will suit you best.

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Focus on your strengths

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To choose your strategy, think about your knowledge or experience in trading, whether it be technical analysis, fundamental analysis, or general market knowledge. You could focus on one particular type of approach and become an expert at it.

For example, if you have a background in economics, it might be helpful to apply the economic theory when making predictions for the price direction.

We at GoldSignals specialise in XAUUSD (Gold) trading and a few major pairs.

We only trade the XAUUSD (Gold) contract with a pre-defined set of convergence rules. We use these rules to ensure that we always open trades on the right side of the market and avoid any unnecessary trades and, therefore, risk.

Instead of trading many instruments on the XAUUSD (Gold) contract, we believe that you can gain an edge by trading one single instrument for a more extended period of time.

It is also essential to think about how much trade risk you are willing to take. If you have a strong understanding of the market, this will enable you to make fewer trades.

If you are not too good at technical analysis, then an alternative approach might be to find some traders who can identify the main trend and trade only in this direction.

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Consistency is key

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With appropriate risk management, one does not need to trade many pairs or instruments.

By trading fewer instruments, you can gain an edge and let your winners run and cut your losers short, resulting in a smaller loss for each trade. By identifying the trend direction,  one can hold fewer positions, but instead of waiting for the trend to complete its move, one can take the position for a quick profit.

Practice on the demo account with very small amounts of money before you start trading live with real money. By doing this, you can avoid losing your capital early in your trading career.

Once you have a winning strategy focusing on one or a few instruments, you can be more in tune with the price action and markets movements and not miss any opportunities that may arise in your strategy.
A strategy that requires ‘five minutes a day’ is not going to work out in the real world because you will often find yourself wanting to do more due to the excitement of trading. Therefore, you must have a strategy with which you can keep your trading time requirements minimal.

When it comes to markets, momentum and trends are your best friends. Basing your trades on sound analysis of market conditions and identifying solid trends in the market is essential to commerce with confidence.

Be a specialist. Hone your craft, and you will find yourself trading more successfully.

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If you want to see our specialists gold analysis, market insights and see our trades, join our FREE telegram channel - HERE

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-Adrian