The Top 7 Things to Avoid with your Forex trading system
Written by OnlineLoan on 00:01The Top 7 Things to Avoid with your Forex trading system
By: Mark Soberman
You should already know what features you want to have in your Forex trading system. At the same time, there are some things that you are better off without, and here is my short list of seven such items.
1. The first thing that you do not want is a system that is hard to understand. If you do not understand your system, then it will be hard for you to have confidence in what it is telling you, and also difficult for you to adjust it if circumstances change. Many beginners make the mistake of over complicating their systems, but experienced traders will tell you to keep it simple.
2. It is also very difficult if you adopt a system where you are not able to give and receive feedback from the designers and sellers of the system. If you have been sold a system, and now have the feeling that you are on your own, then the system may not work for you. You should avoid dealing with anyone who does not give ongoing training and support.
3. You should avoid any system that does not have an active forum between the users. The advice you can get on such a forum is invaluable in making sure that you use the system to its fullest, and can share and find answers to your problems.
4. You must avoid trying to use a system where you have not done or seen adequate back testing. You'll find that as soon as the going gets tough, and a trade or two do not work out, fear will set in and you will be tempted to abandon the system or modify it spontaneously. You need to have confidence that if you follow your system you will make money.
5. Another way to become vulnerable to the effects of fear is to risk too much money on any individual trade. Avoid "betting the farm" on any trade, regardless of how safe and secure it seems the outcome will be. The market will always suit itself, and if you trade with a large amount of your working capital, you may find that your trading career comes to a premature halt.
6. When you have a system in place, you must avoid deviating from it and trying to "second guess" it. In particular, if the trade goes against you, you must have no hesitation in closing it out at your stop loss point.
7. While on the topic of money management, you should avoid entering any trade until you have a clear idea of the risk/reward, and a value for the exit should the trade run the wrong way. When you see the market turn against you, then is not the time to start figuring out how much you can lose.
In summary, your trading system should be clear defined, allowing no subjective decisions, it should be simple to understand and adaptable to your requirements.
Mark Soberman of NetPicks LLC has been trading for over 20 yrs and offers free educational resources, live forex and futures signal services, as well as a new product focused on trading the forex market.FX Live!
Mark Soberman of NetPicks LLC has been trading for over 20 yrs and offers free educational resources, live forex and futures signal services, as well as a new product focused on trading the forex market.FX Live!
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