What do I need to know about a forex trading system?
April 21st, 2010
How can you quickly evaluate a forex trading system to decide if the system is right for you?
That is a good question you must ask yourself because there are some very important factors that go into this decision.
Something alot of people don’t even consider in the beginning is will this trading system fit into the time I have available?
What type of time will I need to set aside in order to master this system?
How does this system fit into my risk tolerance?
Is there normally a lot of draw down or a small amount of draw down?
Is it forex scalping where you will have lots of action? If this is the case you will be in and out of your trades in minutes and you must have high levels of accuracy. normally this is the hardest type of trading to master. So the idea is that you must be very accurate!
Is it a forex day trading system where I would enter the trade and exit the trade usually within a 24 period of time? The reward to risk can be 1:2, 1:3 or higher.
Usually this type of trading strategy employs a trade management plan that includes a moving stop loss known as a trailing stop. This allows you to cut your losses and let your earnings run.
Is it a forex swing trading system where I would enter the trade and exit the trade within a couple days? Usually this trade strategy requires a deeper stop loss. In many cases with a trade management plan a lot of forex day trading entries turn into swing trades which allows usually for a tighter stop loss.
Forex Trading Coaches teaches top down marketplace analysis as part of our “MACD 3 Forex Trading System” we’ve found a “Sweet Spot” in the market video course.
Our system is a forex day trading system that turns a lot of the trades into swing trades. We employ support and resistance, momentum, timing and setup and entry. This system allows for small stop losses along with the potential for nice 1:2 and greater reward to risk.
We also allow our members the use of our “FTC Trade Assistant” Expert Advisor for Meta Trader 4. We have a trade management plan programmed in that moves your stop to even after the first target has been reached then trailing the profits along the way. We also have a LIVE trading webinar you can join.
No matter what forex trading system you prefer, make sure the number one focus is top down market analysis and key levels of support and resistance. It’s crucial to always know where price action is in the BIG PICTURE. The best time frames to spend most of your time in is 4 hour chart and above all the way up the monthly chart time frame.
Following these principles will get you off to a good start with your forex trading.