If you want to make big profits, then you should know that the best way is do it for yourself - and not rely on others.
Any trader (even a novice) can build a successful FOREX trading system - and this article shows you how to build a profitable system in five simple steps.
What Makes a Successful FOREX Trading System?
Successful trading systems have three main characteristics:
1. They are Simple
Forget complicated systems with lots of rules - its a proven fact that simple systems work better - and are less likely to fail, in the brutal world of trading.
2. They Run Profits and Cut Losses
You need to have a longer term FOREX trading system that milks the big trends for profit, and cuts losses quickly.
3. They Follow Long Term Trends
There is no point in trading for small profits - i.e. day trading, as you will never cover your inevitable loses with small profits.
Focus on long-term trends - its these that yield the big profits, as they can last for years.
Now lets get down to the five steps of building a FOREX Trading System:
1. Your Method
We have said to keep it simple, and this is exactly what you should do - just a few rules, and a robust money management system.
2. Spotting Opportunities
Look for the long-term weekly trends, and then move to daily charts to time entry. When we say long-term trends, we mean months, or years - NOT just a week or two.
3. The Best Way to Trade Currencies is via a Breakout Method.
Breakouts occur in all currency markets all the time - so base your system on a trend following breakout system.
There isnt space here to describe exactly what a breakout system is, but we have articles on breakouts posted on our web site.
Its a fact that most of the worlds billionaire traders use breakout systems in their trading - and you should use a breakout system as well.
4. Timing Entry
The best way to time an entry is to watch for a break on the chart, confirmed by stochastics crossing with bullish or bearish divergence this is a great timing tool.
When you are in strongly trending markets, you can also use Bollinger bands, to time your entries - and take profits.
The Bollinger band is a great filter indicator, and all traders should consider it.
5. Money Management
If you are following a breakout method, either the trade runs quickly in your favor - or the break is false and quickly reverses.
Dont put your stop just below the breakout point! - If the trade does not follow through within the day, exit the market, and use a monetary stop in the day session.
A Simple F0REX Trading System for Profit
With the above system, you will focus on the longer-term trends - and milk them for maximum profit.
You will also not trade frequently, and you will liquidate losers quickly.
We dont have space here to go through how to use the indicators, but with a bit of research and testing you will see why a FOREX trading system built on the above principles, will work, and will continue to work.
The system will give you a lot more profit than the so called predictive, over hyped complicated systems, sold by vendors and gurus these systems only work in back testing.
Build yourself a FOREX trading system - and see for yourself, just how profitable they can be!
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