Do you have your own profitable Forex trading systems? Are you intending to buy one or build one your own?
Forex trading systems are your set of rules to help you profit from the Forex market over and over again. It should help you to decide from trade entry to trade exit. It should also serve to protect your capital from any adverse market conditions and to maximize your profits during any profitable trend.
With a good Forex trading system, you should never need to think twice about entering or exiting a trade. You know that it will yield you great profits over the long term. However, with so many Forex trading systems, picking one that is profitable consistently is not easy.
Today, we are going to cover the 7 secrets to picking a profitable trading system that will make you profits consistently day in day out.
1. Do Not Pick a Day Trading System
The idea of trading many times in a day to increase your profits seems wonderful. You must be thinking the more you trade, the more money you can win! This concept has leave many day traders looking for the perfect Forex day trading systems.
Yet most will failed and lose their money. There is a reason why day trading can hardly work for many. When you are day trading, you are exploiting the short term movement in a single day. The problem is this intra-day movement is very volatile and random.
It can spike huge in either way and the average trader will find it hard to keep making the correct decisions. You would not see many rich day traders in the market. Have you ever see Warren Buffet encouraging day trading? No! He has in fact persuade traders not to trade unless necessary.
2. Simple Trading System Works Best
Do you know that simple trading systems can work in any kind of market environment? It does not waiver in hard market conditions as it does not try to curve fit.
A complicated system will try to use many indicators to reach a trading decision. Such systems often fail when the market changes its personality. In short, complexity setup does not add to your profits. The key reason why simple system has always outperformed a complicated system is the trader himself.
When the trader understand the simple system, he has more confident to execute a trade. He knows the principle behind it and will continue using this system even during losing periods. By using the same system over a large sample of trades, you will emerge profitable with a balanced number of winning and losing trades. Thus the simple forex system often results in an overall net profit.
3. Understand How Your Trading System Works
Never buy a black box system when you do not know how it works.
There is a lot of trading software that gives you a signal upon entering some parameters. Let me caution like this can be a bad choice to take.
Everything goes fine when you win but the problem crops up when you lose. You have no idea why it loses money because you do not know how it works. All the question marks start appearing and you will soon lose confidence. A trading system without you understanding and confidence is gone.
You will not be able to trade it for a large sample of trades to make any profits. That is why you should stick to a Forex trading system that you are able to understand and manually trade with.