Home > Trading practice > Forex online trading system

Forex online trading system

Forex online trading system can be bought for a fee, available for free or developed or customized by investors based on their own experience and what works for them. The latter is also the best way around as no one is willing to share foolproof trading strategies if they are constant winners. After all, forex experts do not share the same idea on which day trading systems and tools being the best.

When a trading tool is opaque, its full potential and analysis is not clear. When a tool is transparent, its outcome is immediately understood and obvious to see. The book 'Getting Started in Forex Trading Strategies' by Michael Duane Archer, "Indicators are generally opaque. Charts are transparent." An investor can be a 'take and run' scalper or hold open position for long term, each with their own set of strategies. All the while, the fundamentals of trading systems don't change.

A forex investor can study all the indicators, signals, charts and past performances for various length of time to devise trading systems, but at the core of these strategies is the trader himself. This one factor can make all the difference as there have been instances where a master trader can gain massive profit using basic system but not the other way round.

Jacques Magliolo, author of the book 'Richer Than Buffett' said, "People are the weakest link in any trading plan. Emotions are the trader's worst enemy. resulting in errors in judgement." In his book, Magliolo urged investors to, "ignore the emotions of the masses of investors and traders in the market and learn to control your own emotions."

Funnily enough, investors are usually unhappy when they made a profit after a sale, if prices continue to excalate further. On the other hand, they will feel relieved if they lose some money before their stop-loss order save them from further loss. If you haven't already notice, there is a serious problem in both scenes, where one actually feel bad when winning and relieved when losing. Hence, the best day trading systems are built around controlling the emotion of the trader.

Developing a Disciplined Trader Mentality

To ensure that the mind is not easily swayed or effected, select a comfortable position size and not risk a high stake when in doubt. Having a higher tolerance level of risk and possible glitch such as slippage comes in at a close second. Thirdly, always use stop-loss orders to protect your capital but let profit run. Certainly, this approach requires further fine-tuning in the hands of individual investors.

Emotions Take The Back Seat When Trading

You do not want to be right when it comes to forex. Not that it matters anyway. Remember, the key is to make money, not for your gut instinct to be right or wrong. This premonition that forex traders have when they are in a losing streak also tend to let them to believe that the market is out to get them. In this case, they are letting their emotions get to their head when they clearly know that the forex market is too big to target anyone.

It is not easy to stay cool when your hard earned money is at stake. For many seasoned investors, they have learnt the hard way to see pips as pips, and not as money when trading. Perhaps the one strategy that many forex investors failed to see and benefit from is accepting losses as one of the trading element and learn from it . The Chinese have a popular saying of 'knowing the strength of oneself and its opponent, a war can be won 100 times out of 100 battles'. Knowing the characteristics of a loss, how it occur, its likely factors, the sequence of it occuring and why it occurred is a basic system that investors cannot bear facing.

Taking Calculated Risks With Probability

Charts and indicators fall into this category as they provide the probability for trading. However, past successes achieved can cause traders to be over-confident and neglect taking calculated risks when entering the market. Again, this is an example of the human nature downside in trading. Once a trader had a taste of success, his respect for money will wane and is less cautious and more superstitious in trading, a sure-fire recipe to forex hell.

With these examples, clearly the strongest day trading systems in forex involves controlling the human mind and emotion, before other external trading tools can come into the picture. Whatever systems that you develope for yourself in the future must stem from inside of you to really reap the benefits of forex trading.

Written by: Natali Ya

Related topics: