Successfully trading the stock or Forex market needs a strategy. There is no room for second guessing when it comes to making money trading those giants. Fortunately, we will be able to discuss how to start picking the best trading system easily according to investment size, time-frame and other factors. We will then suggest a strategy that is working for us for years now. This strategy is for you to test yourself. Not every trading strategy is going to work for everyone, but i am sure this will give you a great starting point toill you develop your trading style.
Trading systems that work with small time frames like M1, M5 and M15 are usually easy to apply. The only downfall is that most of the time you should spend much time in front of your chart. My advice is to execute your trades at at least M5 or M15 and aim at 30 to over 100 pips per position. If you find a system that does not offer such qualification, skip to the next one. Also be aware that even if you like this trading style, many brokers usually forbid you from scalping pips using small time-frames.
Forex trading systems are many. They mostly can work on other financial instruments as well. Stocks, mutual funds, futures and options are applicable to many forex trading strategies. So consider researching a strategy that can work on all or some of them. We think this way because we are taking into account that you may expand your trading career when you become an advanced trader someday. You do not want to decide trading forex futures later to end up realizing that you need to develop or research a new system all over again.
Stock trading systems tend to be relevant for larger time frames. The hour and above charts are best for this type of markets. The sad thing about trading stocks is that their market hours are limited while forex trading hours are available 24 hours a day. This will lead us to the conclusion that not all stock trading systems can be effective for currency traders. Yet, there are many strategies that work like charm originally generated by the stock environment such as Candlestick patterns and Trendlines.
Automated trading systems are not the best trading systems as many would claim. However, some traders from countries like Russia, Indonesia and USA provided that automated trading software can be rewarding if you control their risk settings carefully. Watch out for every automated Expert Advisor you meet on your way to automatic trades. Test only those with good money management settings and keep testing them for months before switching them on. I can not stress enough on how important this is.
Best trading systems around are simply those that spark topics and discussions. It's a great thing that internet has forums about strategies for us to evaluate through. For me, it was a long road of researching in order to finally find the one that works for me the most. By time, i started my trading system development until i landed on the profit formula without having to invest in fancy techniques. If you can not find a nice strategy in books or robots, wander around trading forums and monitor what traders are buzzing about.
Another way to speed up your trip of finding the right strategy is by digging through many of the trading system reviews on websites dedicated to such task. These reviews could give you a better idea on what really is globally convenient for the public. Finally, Pay attention to spare time availability and risk aversion before choosing a system.
Source by Medhat Youssef