Forex Trading System (principles of)

WHY TRADING SYSTEM?

To wage a successful trading on the foreign exchange market, it is necessary to act systemically and control emotions, which often influenced to take hasty and rash decisions. Therefore traders use in their work in the Forex market trading systems.

In trading, trading systems play the same role as the business plan for the company's development - is pre-planning tool to more accurately calculate the risk and increase the probability of profit. 
Trading system or trading strategy is a set of rules governing the conditions under which and the order in which the trader has to open and close positions.

Its value lies in the clear wording of the criteria and conditions to be met by each transaction the trader in the currency market. Eliminating the possibility of an ambiguous assessment of the situation, the trading system reduces psychological pressure to which the trader is subject to, and helps to more balanced approach to important decisions.

The trading system gives the trader a detailed work plan for a specific time interval: it may be trading on the daily candle, hour or even 10-minute. Which strategy will give the best results - you decide, based on the individual financial and time possibilities, as well as those that are priorities for you in the forex market.

As a rule, the development of a trading system is made for a particular currency pair, for example EUR / USD. This does not mean that such a strategy will give a negative result in the commission of trading in GBP / USD. But you will need to personally test it, and possibly make changes, for example, to carry out an adjustment of Stop Loss and Take Profit.

The trading system should have a clear POSITIONING

By building your own trading system, first of all, you will need to decide which areas of the market it is intended - for the long-term trend or the side corridors. The system can be combined, but as a rule, the efficiency of the classic trend systems is reduced when working in the corridor, and vice versa, the system for the side of the market may not be the best way to show yourself in the trend. Therefore, the trader requires a clear understanding on what market segments the system will work effectively, and what potentially favorable sites it will determine.

A very important role in building a trading system is given the amount of the transaction (the largest traded lot). It may remain unchanged or change as a result of previous transactions, it is called money management - Capital management. Each approach has its advantages and risks. The main scale evaluating the effectiveness of an approach based on the balance of risk to potential profits. High yield is linked to the need to take a higher risk, less risky currency operations - it deals with low profitability.

On the occurrence of the optimum moment for the market entry trader learns by signals which the system delivers using various analytical tools: levels, lines, graphic shapes, configurations candle, technical indicators. You can focus on the indicators or levels and figures - the choice of the trading system and the signal is completely dependent on the personal preferences of the trader. 
Built to operate on the market of Forex trading systems - is so broad topic that we should return to its more detailed study after the novice master the basic decision-making tools, and learn about the nuances of the foreign exchange market. First, we give an example of a very simple trading system.

ADVANTAGES OF TRADING SYSTEM BEFORE chaotic TRAFFICKING

The main goal of any trading system - a system approach. TC - is the order and sequence. Trading system saves players from impulsive actions, dashing aside, ill-considered actions. It is better to give up potentially lucrative deal if it does not fit into the framework of the chosen trading system - PROFITS preferable to the possible collapse. As recognized by experienced traders who know the glory and fall, they saw the need to stop, close, stop trading, but blindly follow their desires and temptations, acting like stubborn donkeys and sheep greedy. The most difficult thing in Forex - learn to follow by the same you worked out the rules of its trading system. "Step to the side - shoot, jump in place is regarded as a provocation" - usually Gulag camps just for Forex.

Briefly summarize the main advantages of the Forex trading system. 
• Working on a clear plan, you will have the confidence to make decisions. 
• Quality System eliminates the influence of emotional factors on the trading result. 
• Your main task - the analysis of statistics: it is necessary to create such rules of the trading system, in which the profitability of transactions over a long period would overlap the losses incurred in individual transactions. 
• If you have an effective trading system in the Forex currency market is possible to achieve stable capital growth.

General conclusion.

Why do traders need a trading system (the "new", "good" or "better")? Any system (stress - ANY) is necessary in order to ensure that the same results.

For example, if a trader sells a haphazard manner, in similar situations, he can perform contrary actions. 
In contrast, trading systemically, in the same (or similar) situations traders make the same actions.

In short trading system allows you to bring actions to automatism, and it is very saves time and nerves!

Recently there was a fashion for options. I treat them with skepticism, but, nevertheless, the system (in separate articles) will be considered for binary options. 
Which is better - to trade "hands" or use automatic (mechanical) trading systems?

The more experience, the more traders are inclined to favor the automation! Blessing now there are special Exchange, where trading robot can do for your technical requirements. Development (buy or sell) will cost you approximately in $ 100-200.Although there are expensive items cost under $ 1000.