In the quest for Forex profits all traders are looking for profitable Forex trading systems that they can execute as part of their Forex trading strategy. There is no doubt that to be successful in Forex trading you are going to need to trade a profitable system.
So what makes a Forex trading system profitable?
Profitable Forex trading systems can be identified as displaying one or more of the following characteristics:
1. Profitable Forex Trading Systems are Simple to Understand
Forget over complicated systems. Simple systems with easily repeatable strategies work far better than trading systems that are overcomplicated by rules. Furthermore if the strategy behind the system is simple, the chances are that it will also be easy to execute. Forex systems which are hard to implement cause traders more problems than profits.
2. Profitable Systems Provide Accurate Timing of Trade Entries
To be profitable the system must show precision in timing trade entries. For this it will need to follow a proven technical strategy that can be freely executed in the market. Calling a market direction correctly but incorrectly timing the entry is not a profitable way to trade. The best Forex trading systems will provide an early entry into profitable moves.
3. ...and Accurate Timing of Trade Exits!
Ok so just because the Forex trading system has entered a trade at the optimum point, it also needs to include rules to ensure that it exits it at the correct time. Most profitable systems will have defined levels in the market to take profits as well as a set exit points to sell a trade goes the wrong way. Systems which fail to observe this rule will turn potentially winning trades into losses.
4. Offer Good Risk vs Reward
Many Forex systems will prove ultimately unprofitable because the risk/ reward ratio employed by the system is not in the systems favor. By this we mean the profits made from the winning trades need to be sufficient to cover for the inevitable losses. Profitable systems don't necessarily need to win more trades than they lose. It is the profit to loss ratio that is important. For example there is little point in employing a system which wins 9 out of 10 trades, only for the tenth trade to wipe out the preceding profits.
5. Have Sound Money Management
Good money management principles are an integral part of a profitable Forex system. Winning strategies will employ proper money management rules that will help to cope with 'draw down' on the account when times are hard. The aim of any good money management strategy is to keep the system trading and limit losses on your account. If proper money management is not employed then any profits will be short lived. This can turn an otherwise profitable trading system into one which quickly fails for you.
So what makes a Forex trading system profitable?
Profitable Forex trading systems can be identified as displaying one or more of the following characteristics:
1. Profitable Forex Trading Systems are Simple to Understand
Forget over complicated systems. Simple systems with easily repeatable strategies work far better than trading systems that are overcomplicated by rules. Furthermore if the strategy behind the system is simple, the chances are that it will also be easy to execute. Forex systems which are hard to implement cause traders more problems than profits.
2. Profitable Systems Provide Accurate Timing of Trade Entries
To be profitable the system must show precision in timing trade entries. For this it will need to follow a proven technical strategy that can be freely executed in the market. Calling a market direction correctly but incorrectly timing the entry is not a profitable way to trade. The best Forex trading systems will provide an early entry into profitable moves.
3. ...and Accurate Timing of Trade Exits!
Ok so just because the Forex trading system has entered a trade at the optimum point, it also needs to include rules to ensure that it exits it at the correct time. Most profitable systems will have defined levels in the market to take profits as well as a set exit points to sell a trade goes the wrong way. Systems which fail to observe this rule will turn potentially winning trades into losses.
4. Offer Good Risk vs Reward
Many Forex systems will prove ultimately unprofitable because the risk/ reward ratio employed by the system is not in the systems favor. By this we mean the profits made from the winning trades need to be sufficient to cover for the inevitable losses. Profitable systems don't necessarily need to win more trades than they lose. It is the profit to loss ratio that is important. For example there is little point in employing a system which wins 9 out of 10 trades, only for the tenth trade to wipe out the preceding profits.
5. Have Sound Money Management
Good money management principles are an integral part of a profitable Forex system. Winning strategies will employ proper money management rules that will help to cope with 'draw down' on the account when times are hard. The aim of any good money management strategy is to keep the system trading and limit losses on your account. If proper money management is not employed then any profits will be short lived. This can turn an otherwise profitable trading system into one which quickly fails for you.
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