Forex International

Imagine that System A has seventy percent winning trades, making thirty pips profit on the wins and losing forty pips on the losses. System B has 40 percent winning trades, seventy pips up on the wins and thirty pips down on the losses. System B will make barely more profit in the long run, it will often have runs of many losses in a row. This is often really hard to handle psychologically and could result in the trader losing belief in the system and quitting when he was down. On the other hand it could also be hard to cope with systems that have huge single losses. Another system that has eighty five percent winning trades, making twenty pips profit on the wins and losing sixty pips on the bad trades, would also make a profit in the long run but just two those sixty pip losses in a row may lead to high stress and bad decision making.

Does It Fit My Trading Style?

Forex traders hunting for day-trading systems have different needs than longer term traders. If you only have a little window of time when you can trade, you may need a system that works very well for a specific currency pair that’s active at that point. There might be many factors like this to take into account when considering forex day trading systems, dependent on your current position. There are such a lot of foreign exchange day trading systems that it can be terribly tough for a trader to find the best one.

Of course, if there was one best system that topped them all and worked for everyone with assured profits, we might all be employing it. But this is actually not possible. Each time somebody makes money in the currency market, someone else has to lose. Sure, some of the slack is taken by individuals who are exchanging currency because they actually need it for import and export, travel or investments. But the gigantic majority of the currency exchanged every day belongs to traders. So if everyone in currency trading used the same system, it wouldn’t work any more .

So we should celebrate the variety of currency exchange day-trading systems in the same way that we celebrate biological variety, and just go look for one that can work for us. How can we know that? We are able to ask ourselves these questions:

Is It simple To Understand?

The best day trading systems are usually simple. Checking 2-3 signals in two time frames is plenty. Of course, if there was one best system that topped them all and worked for everybody with guaranteed profits, we would all be employing it. But this is basically not possible. Every time somebody makes money in the foreign exchange market, someone else has to lose. Sure, some of the slack is taken by people who are exchanging currency because they really need it for export and import, travel or investments. But the massive majority of the currency exchanged each day belongs to traders. So we should celebrate the diversity of currency exchange daytrading systems in the same way that we celebrate biological variety, and just go look for one that can work for us. How will we know that? We can ask ourselves these questions:

Is It straightforward To Understand?

The best day-trading systems are usually simple. Foreign exchange day traders need to act fast to maximise their profits so you do not need to be having to take a look at 1,000,000 different indicators before you can open a trade. Checking 2-3 signals in 2 time frames is plenty.

Does it have A Lot Of Winning Trades?

Most people work the best with systems that have a relatively high number of winning trades. The explanation for this is only mental.