Perfecting your trading system in Forex market


Trading is one of the most complex tasks in the world. Everyone wants to become successful in currency trading but only 5% of the traders are able to make a consistent profit. The majority of the retail traders are losing money due to lack of trading knowledge and discipline. You need to have a balanced trading system to deal with the dynamic nature of this market. Developing a simple trading system is very easy but fine-tuning the system with the market dynamics is the hardest part of currency trading. Some of you might say that you will buy an expensive trading system from the successful trader but this will never help you. Every trader is different in the forex market. You have to understand the diversified nature of the trader’s mentality. Based on your personality and daily needs, you have to be positive changes to your existing system to become a profitable trader.

How you do you develop a perfect trading system?

In order to create a perfect trading system, you must learn the three major sections of market analysis. The technical analysis will help you to find the high-quality trades at the key support and resistance level. Fundamental sections will guide you to ride the long-term market trend to maximize your profit factors. Last but not the least, sentiment analysis will help you to understand the overall conditions of the market. Based on this three-factor you have to develop a simple but profitable trading system.

The use demo trading accounts

Before you start trading the live market with your new trading system, you have to demo trade the market for the first few months. If you can make a consistent profit, and deal with your losing trades, you are on the right path. Demo trading account is often considered as the best way to learn currency trading. Some of you might say that there is no emotional attachment in demo trading. This is true to a certain extent but if you fail to demo trade the market with patience chances are very high you will fail to wait on the sideline in the real market. Patience is very crucial for finding the perfect trade in Forex market.

Maintain a trading journal

As a new trader, it’s very normal that you will make mistake on regular basis. But this doesn’t mean you will quit Forex trading. You need to learn from your trading mistakes to fine tune your trading system. The retail traders often say they don’t know how to assess their trading mistake. But there is nothing to worry. If you start following a paper-based trading journal it won’t take long to identify the key mistake in your trading strategy. During the weekend assess your trading journal so that can bring positive change to your existing system.

Ignore the negative risk-reward trade setup

Finding high-risk reward trade setup is very important for your trading success. The rookie traders are always placing a trade with the negative risk-reward ratio. Even after winning more trades they are still losing money. On the contrary, the experienced professionals are always placing a trade by assessing the risk-reward ratio. Aim for high-risk reward ratio trade setup so that you can easily cover your trading loss. Ignore the low-quality trades. You don’t have to place hundreds of trades in a month to secure your whole month profit. A single high-quality trade is enough to secure your whole month profit.

Learn fundamental analysis

The new traders often ignore the fundamental factors of the market. In the eyes of the trained professionals, fundamental analysis is often considered as the most important element in currency trading profession. Make sure you do the fundamental analysis before you execute any orders. You must use the three major form of market analysis to find the best trade setups in this trading industry.