What Forex Trading System Would You Pick?
Oftentimes I see traders continue to change their trading system as soon as it gives them a losing signal. I was one of them some time ago when I first started trading currencies. I didn’t have the necessary patience to test the system and to keep going with it even if it loses a few times. Later I understood that it is not the system is the most important thing in trading. I chose the trading style that suits me personally. Do you know what trading system suits your personality?
If you have a patience to wait for trading setup and then monitor your trade for a few days then you most probably will succeed with the long-term trading style such as swing trading. On the other hand if you have less patience but better control your emotions than a sorter-term trading style or even scalping may be best for you.
I personally like longer-term trades. I dislike scalping Forex. First of all I yeah ldon’t have emotional control that it takes to succeed with scalping. Secondly I don’t scalp the market because of spreads. You pay your broker not a commission as in stock market but a spread - the difference between buy and sell prices of a currency pair. It makes a strategy that requires many entries in a short time very hard to make into a successful one.
Let’s say you trade some currency pair with a broker who has three pips spread. If scalping is your method then probably you are making around ten trades a day with about ten pips of profit in each trade. Ten trades will cost you thirty pips in spread per day. It will add up into hundred and fifty pips a week and about five hundred pips a month. You see how hard it is to make such a system profitable.
On the other hand when I am making one trade in a few days and my profit target is usually well over a hundred pips it becomes much easier to make such system profitable one. Besides there is very little emotional stress since I monitor a trade for very little time every day.
I am not criticizing any trading style. If you are consistently profitable with scalping then by all means continue doing it. My point here is that you need to know yourself before you pick a Forex trading strategy. If you study yourself well enough to know your strengths and weaknesses then it’s much easier to pick a system that will work successfully for you.
Albert Schmidt is a part-time currency trader. After quite a long time of struggle he learned to make consistent profit trading in Forex. Review a trading strategy he successfully uses in his trades.