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Building your own currency trading system is far easier than most forex traders think it is and here we will look at building one in three simple steps that will give you a trading system you can make big gains with quickly.
Building your own currency trading system is essential to your success as no one else will help you get rich your on your own. All the successful traders do it on their own – success comes from within not from someone else and as most of the systems sold simply don’t work.
Lets get started and build a simple robust currency trading system for big profits.
The first think you need to decide when devising your forex trading strategy is to take into account your own personality - Are you a patient trader or do you like more action?
If you are a patient trader long term trend following is good if you like action then try forex swing trading (under no circumstances whatsoever try day trading it doesn’t work) once you have decided you need to build your trading system.
1. Support Resistance and Breakouts
Most profitable currency trading systems use support and resistance and aim to sell into resistance and buy into support.
You can do the above but you also need to learn to buy breakouts to new highs as it’s the most profitable form of trading.
It’s a fact that most big currency trends start From New Market HIGHS NOT market lows. If you go with these breaks you will catch some of the best high odds and profitable trades. In your currency trading system learn to do both and you will make bigger profits overall.
2. Use Momentum
Most currency trading systems fail because they try and predict where prices are going and if you predict your hoping and the FX markets don’t reward you for hope.
For example, a forex trader will buy into support and simply hope it holds however:
You need to wait for CONFIRMATION that any level of support holds before executing ANY Trading signal, this way you are trading with price momentum and have the odds on your side.
On the other hand - if you have a break of resistance make sure price momentum supports i.e. price momentum has turned down.
If you are unfamiliar with price momentum you need to lean as you wont win without it (check our other articles) and read up on these great indicators:
Relative Strength Index (RSI), Stochastic, Average Directional Movement (ADX).
Forex trading is all about trading with the odds and if you use momentum you will achieve this and enjoy currency trading success.
3. Running Profits and Cutting Losses
Getting a method together is relatively simple.
The hard part is money management and battling the big problem that all traders face - volatility Many currency trading systems are right about market direction but their trading signals get stopped out by volatility.
In most cases this is because traders have stops within the market noise of the trade, or trail stops too quickly. When deciding on money management for your trading system make sure that you do not try and restrict risk to much or you will create it and guarantee you get stopped out and lose.
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