subject: How To Get The Best Forex Trading System? [print this page] How To Get The Best Forex Trading System?
This question has a quite surprising answer: There is not a single system anywhere that will work best for all traders under every kind of circumstance. The reason for this is quite simple: as human being traders might be trading the same market, but they will not react the same way to a particular market situation than all other traders. What is the best forex trading system for you might thus not be a good system for another trader at all.
To give just a short example: There are many highly experienced traders out there who trade without making use of a stop loss. Their reason for this is that they want to provide the market with sufficient space to 'breathe' - to move up and down before eventually heading upward.
They have the experience and the strength to get out of a trade that is heading the wrong way, however, the moment it becomes clear that it's not going to turn around.
Should you be one of the countless traders who have the unfortunate trait of not being able to let go of losing trades, forever hoping it will turn profitable, your trading system should under no circumstances exclude a stop loss. This stop loss should be fixed before you go into any trade. Without it, your weakness of hanging on to trades will eventually ruin you financially.
The same applies to profitable trades. To make money with trading in the long run, you not only have to keep your losses small, you have to allow profitable trades to mature fully. If you have the weakness of cashing in on profitable trades long before they reach their full potential, you will end up with a number of small profits which could easily be turned into a loss by a single bad trade. Your trading system should therefore incorporate a 'take profit' level at all times, which stops you from getting out before you've made a specific profit on such a trade.
The best forex trading system for any individual trader is therefore one that makes provision for his strengths as well as his weaknesses. The system should also take into account the size of his trading account. A trader with half a million dollars in his trading account should certainly use a different system than someone with two hundred dollars in his account.
