Developing the perfect trading system is really hard. Majority of the traders in the online trading world tends to use other people trading system. Some of them even buy professional trading strategy from famous trading websites.
Do you think that you can become a successful trader with other people trading system? The simple answer is NO. You need to develop your own trading system based on your personality so that you can trade the live assets with an extreme level of confidence.
But to do so you must have clear knowledge about the support and resistance level. Instead of using tons of indicators you need to develop a simple trading system which can help you to find profitable trades under different market conditions.
The life of the professional Forex trader is not so easy since they have to keep pace with the changes in this market. Today we will give you some amazing tips to develop your own trading system based on your personality.
Assess your personality
Finding your own personality is the first thing that you should do to become a successful trader. Majority of the traders don’t know which system will suit them best.
For instance, if you love quick profit then scalping the market will make sense. On the contrary, if you want to stay safe and focus on steady income then long term trading should be the perfect solution for you. So take your time and ask yourself which system will suits you the best. But we would like to give you a very useful information before you give your own decision.
This market tends to generate more profit when the traders use the higher time frame. It’s not like that scalping is the bad system but in order to trade the lower time frame, you need to have a clear understanding of the market dynamics.
Learn the price action trading strategy
The price action trading system is one of the easiest ways to find high-quality trading signals. Most of the professional traders at Saxo use the price action confirmation signal to execute their trade in favor of the long term trend. It’s not like that you will have to trade the market with this system but if you incorporate price action signal to your trading system then you can easily execute the best quality trades in favor of the market. Mastering all the reliable candlestick pattern and executing the trades in your Forex trading account is not all easy. It requires time and patience to filter the best possible trade setups.
Use the advance money management system
The traditional money management system will only help you to safe guard your investment. But this will never help you to become a successful trader. In fact, most of the experienced traders always use the advance knowledge of money management to limit their risk exposure.
For instance, most of us know about the famous 2% rule in the Forex market. But do you really think that this will help us to become a successful trader? You need to know your own risk tolerance level based on that you should calculate your lot size and place your trade with rational logic.
As a currency trader, you will always have some losing trades. But this should have any impact on your psychology.
Majority of the Forex traders doesn’t know how to control their emotion thus execute big lot trade after a series of losing trades. But recovery factor shouldn’t be like this. You need to aim for high risk-reward trades to save your investment. If you simply trade with 1:2 risk-reward ratios then after losing 50% of the time, you will be in the break-even position.
Trading is one of the most elite class profession in this world. You need to develop a solid trading system which will take care your investment under different market condition. Try to trade the higher time frame and use price action signal to filter the best trade setup.
Taylor Z. Jordan is working as a content manager at The Saxo Group which is the leading investment banking and technology company looking back at over two decades of growth and success.
As Saxo helped drive the revolutions that shifted the business time and again, it has always been energised by the same notion that moves us today. Saxo strives to facilitate multi-asset investment and trading by providing access to global financial markets, cutting-edge technologies, and industry-leading expertise.
Tarik Pierce is the founder of InvestorTrip.com and regularly contributes articles to this website.
While living overseas, he uses PureVPN for a low cost VPN service.
He recommends Bluehost for setting up your own personal and/or business blog.
While his background is mostly related to trading stocks, he recently gained interest in real estate crowdfunding with Fundrise.