Are you ready to start trading in the forex market? Want to make some serious cash? If you are, it’s essential that you find the best forex trading system and trade according to its rules.
Unfortunately, 95% of forex traders will lose money. How can you avoid becoming a statistic? By joining eToro’s OpenBook!
There is no one size-fit-all trading system that can work for everyone. That’s why we recommend using eToro’s new OpenBook platform to help build your forex trading strategy. With OpenBook you can copy and learn from the moves of the best, proven, money making traders on eToro. Click the banner below to signup or read more below about building your trading system.
The best forex trading systems will help you to successfully manage your money and make decisions quickly in the hectic forex market. Any strategy worth its salt will tell you:
- Entry Points
- Position Size/Money Management
- Exit Strategy
- Help with Post-Trade Assessment
Here’s what you should look for in each of them
Entry Points
The most important part of any forex strategy are the entry points. Determining when you enter the market can make the difference between making a few pips and making huge gains. It can also make the difference between winning and losing! When you’re looking to buy a trading system or designing your own, make sure that it is based on fundamental principles of chart reading, like candlestick patterns.
Your Trading Strategies Should Always Be Based on Solid, Fundamental Chart Analysis
But this is only the start. You also need to be sure that the strategy isn’t based on lagging indicators. Lagging indicators will provide you with correct information, but only after the market has moving, cheating you out of pips on every trade. One popular type of chart reading strategy to stay away from because of this is weighted moving averages. While weighted moving averages can be a part of forex trading systems, you should never be relying solely on them.
Money Management
Money management and sizing your trade sizes is an essential part of all FX trading systems. Most strategies, even those used by professionals will size your trades only between two and five percent of your trading account balance. This will prevent you from losing all of your money and shifts your focus to making consistent gains instead of searching for the big win, which often ends in disaster.
While you can vary your trade size a little bit within a reasonable range depending on the strength of the signals that you’re getting, the most effective strategy for beginners will be to keep the trade size constant until you know what you’re doing.
Exit Strategy
If you want more of these, make sure to set your stop losses!
Every trade you execute should also have an exit strategy. Most often, exit strategies are in the form of stop-losses. Every time you place a trade make sure that you also place a stop-loss a fixed number of pips below it, especially if you are a beginner. This will help to minimize your losses in the event of a bad trade and help to keep your gains.
Post-Trade Assessment
Especially if you are putting together your own trading system, don’t ever forget to do a post-trade assessment with what you did right and what you did wrong. Make a habit of examining each of your trades. It will help you to learn and develop the best forex trading systems you can.
Now that you know about the components of the best forex system, it’s time for you to make your own. Luckily, if you’re a beginner and don’t know where to start you can take advantage of the eToro OpenBook Platform.
OpenBook makes it easy to develop a winning system by allowing you to copy off of the most successful traders on eToro. You can find out the strategies and times when they trade, and put them to use in developing a winning platform of your own. With a free practices account and thousands of members that trust their forex trading to eToro each day, you’ve got nothing to lose.
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