Best Forex Trading Systems – How To Find Your Grail?
Novice traders are constantly on the lookout for the best Forex trading systems. Many newcomers to the foreign exchange market believe that the Grail is a break-even strategy that brings the maximum allowable profit with the minimum investment. However, this is not entirely true. In fact, the Grail is a trading system that is right for you. If you’ve found a strategy that not only makes a profit, but also gives you pleasure while trading, this is the Grail. You no longer need to search for the best Forex trading systems on various forums and thematic sites, instead, you should focus on your strategy. We will talk about how to find your own strategy and make it profitable in this article.
How to find your strategy?
On various forums, traders very often share their best practices, among which there are sometimes really good strategies. At the same time, the following paradox is observed: one and the same strategy brings profit to some traders, while losses to others. Despite the clear rules of the trading system, which the trader is trying to adhere to, he still suffers losses and sends another strategy to the basket, continuing to search for the best Forex trading systems on the Internet. It’s all about the individual perception of a particular market situation. Why are such methods as Price Action and VSA popular ?? They do not have clear rules, instead of which only general recommendations are given. As a result, each trader interprets these methods in his own way, starting from his own experience. Traders do not mechanically open and close deals, but begin to analyze the market situation as a whole, which ultimately affects the profitability of the strategy.
How to make your strategy profitable?
What is the mistake of many novice traders? They seek to find a profitable strategy without considering their emotional comfort. Oddly enough, trading according to a strategy, first of all, should be enjoyable, and only then make a profit. If you are tired of day trading, then look for strategies on the daily charts . It is more important to find not a ready-made strategy, but to create your own trading system. At the same time, you do not need to come up with something new, since everyone has long thought of it before you, you just need to learn how to correctly apply the knowledge gained in practice. As soon as you find a comfortable trading system for yourself, you need to change something in it. For example, remove something from the strategy or, on the contrary, add your favorite indicator, change the period of the moving average, set stops slightly lower or double the take profit. As a result, you should get an absolutely unique trading system, piece by piece from different strategies. Do not forget also about the fact that very often the profitability of a strategy depends on the choice of a reliable broker .
How to check the profitability of a strategy on history?
After you have chosen a strategy that is comfortable for trading and changed something in it, you can start testing it on history. It is best to manually rewind the chart, determine entry points, take profits and stop losses, writing down the results in a notebook or MS Excel. To speed up the process, you can use various programs that simulate the real movement of the price, but most of them are paid. When testing a strategy on history, you should not rewind the chart more than two years ago, since what was profitable then does not work now, and vice versa, today’s profitable strategies, at that time may show losses. Do not be afraid to share your strategies with other traders on various forums, communicating with them, you can significantly improve its performance. Some traders believe that if they tell about their strategy to other participants in the foreign exchange market, then it will cease to be profitable. However, this is a deep misconception. Remember what we talked about at the beginning of the article. Each trader interprets the rules of the strategy in his own way. This is confirmed by the story of the famous trader and part-time psychiatrist Alexander Elder. When he was writing his first book, then he had a question – to publish the indicator of strength developed by him in the book or not. On the one hand, he wanted to share the indicator with his readers, and on the other hand, he was afraid that if thousands of traders start using it in their trading, it will stop working. Then he went to his old friend and asked the same question, to which his friend replied: “You can publish, anyway every trader will use it in his own way.”
Three misconceptions of traders
- A profitable strategy is one that brings in at least 100% profit per month. Remember, no strategy will show such a percentage of profit if you follow the rules of money management. If you don’t, then sooner or later you may lose your deposit. Any strategy shows an average of 15-20% profit per month, while the bank offers similar interest per year;
- A profitable strategy is one that always closes only with a profit. This is another delusion. There is no need to be afraid of losses, they are inherent in any strategy. To understand whether the strategy is profitable or not, you need to wait at least a month;
- A profitable strategy is one that works equally well on all timeframes, trading instruments, etc. It must be understood that there are no ideal trading systems. There are strategies that show excellent results on daily charts , but get lost during intraday trading.
Once you understand the main mistakes and misconceptions of traders, you no longer need to look for the best Forex trading systems and strategies, you can make money using your own strategy, even if it is not ideal.