There Are Two Main Reasons Why Trading A System With Set Rules Can Work So Well And Make Your Trading Much More Profitable

Category: Finance.

Creating a forex trading system with set rules and trading parameters is the first step you should take in separating yourself from the$ 90+ percent of new traders that fail to turn a profit. First, as long as you do not break the rules of your system, you will never enter the market on a whim.

There are two main reasons why trading a system with set rules can work so well and make your trading much more profitable. You will only place trades when you see a verifiable reason for entering the market. The most important part of a successful forex trading strategy is the EXIT strategy, as determining when to exit the market is usually the most emotional of all trading experiences. Second, since all trading desisions are determined by established parameters, you will not need to deal nearly as much with your own emotions when you are trading. You will be continually be pulled in opposing directions by greed and by excitement. Also, an exit strategy does not need to be too complicated. The part of you the is excited will be happy that you have earned a few pips on the trade and will want to exit with a guaranteed profit, whereas the part of you that is greedy will want to stay in longer to squeeze as many pips out of the market as possible.

You can create a few simple rules based on the time- frame of the chart you are using. So you could create a rule that goes something like I will try to get 45 pips on each trade, and i will exit the market if it goes against me by 25 pips. Just coming up with an exit strategy like this is a very good idea because it eliminates the need to consult your emotions every time you are considering exiting the market. For example, let s say that you are using a 10- minute bar chart, you would probably enter trades and stay in the market for 1- 12 hours. Creating a system that is rather robust and mechanical is a good idea, because ideally what you want to do is completely eliminate yourself from the picture. You almost completely eliminate yourself from the trading picture because, once you accomplish your main job of creating a profitable trading system, all you need to do is methodically and mechanically execute it. Now I know what your thinking. I want to do WHAT? Well, you want to make your job as a forex trader only to CREATE and DEVISE effective and profitable trading strategies. The reason why I say eliminate yourself from the trading picture is because once you have done the hard part of devising a trading system that consistently captures pips, ANYBODY with a basic knowledge of the trading platform you are using could follow these rules and make money.

Remember that what you want to focus on while you are doings your trading is not how much money you are making, but HOW MANY PIPS you are capturing into your account. So long as you follow the system that you have devised, it will lead to completely emotion- free trading, and when it comes to consistently making good money on the forex market, emotions are the enemy. It is subtle shifts in thinking such as this that, will help you, over time to become a very successful trader.

Read more...

Should You Need To Take Out A Loan In The Future You Should Find It A Lot Easier - Finance Blog:

If you are unlucky enough to have a bad credit history then buying a new car may seem impossible however there are many companies that are willing to assist those that have bad credit because they do not require any credit history. Finding a decent car loan when you have bad or no credit history can be a challenge but not something that is impossible.

They Are Used In The Same Way As Other Credit Cards Are - Finance Articles:

Student/ college credit cards are credit cards specifically made for young men and women attending college.

Is The Property And Neighborhood Tenant Friendly - Finance Articles:

There are many questions a buyer of property should ask himself or herself before committing to a real estate investment. When making a purchase in Oklahoma City there are many attractions that will help to make your experience a positive one.