Now that you’re about half way through college, here’s one piece of advice you should always remember.
Be your own trader.
In other words: Don’t follow someone else’s trading advice blindly! Just because someone may be doing well with their method, it doesn’t mean it will work for you.
We’re all in different situations in life, and we all have different market views, thought processes, risk tolerance levels, and market experience. Have your own personalized forex trading plan and update it as you learn from the market.
Developing a Trading Plan and sticking to it are the two main ingredients of trading discipline. But trading discipline isn’t enough. Even solid trading discipline isn’t enough.
It has to be rock solid discipline.
We repeat: rock solid.
Like Zac Efron’s abs.
Plastic solid discipline won’t do. Nor will discipline made from straws and sticks. We don’t want to be little piggies.
We want to be successful traders!
And having rock solid trading discipline is the most important characteristic of successful traders.
A trading plan defines what is supposed to be done, why, when, and how. It covers your trader personality, personal expectations, risk management rules, and trading system(s).
When followed to, a trading plan will help limit trading mistakes and minimize your losses. After all, “If you fail to plan, then you’ve already planned to fail.”
A trading plan removes any bad decision making in the heat of the moment. Your emotions can consume you when money is on the line, causing you to make irrational decisions. You don’t want that to happen.
The best way to prevent it from happening is to minimize (notice we did not say eliminate) thinking by having a plan for every potential market action. With the right forex trading plan, every action is spelled out, so that in the heat of the moment you don’t have to make any rash decisions. You just simply stick to your trading plan.
The Difference Between a Trading Plan and a Trading System
Before we continue, we have to quickly distinguish the difference between a trading plan and a trading system.
A trading system describes how you will enter and exit trades.
A trading system is part of your trading plan but is just one of several important parts, i.e., analysis, executions, risk management, etc.
Since market conditions are always changing, a good trader will usually have two or more trading systems in his or her trading plan.
Trading systems will be covered more in-depth later on in the lesson, but we thought that it was important to point out the difference between the two upfront to avoid any confusion.
Why Do Forex Traders Need A Trading Plan?
A trading plan will make trading simpler than it would be if you traded without one.
Think of when you use a GPS device. You enter where you want to go. It then figures out where you currently are and then shows you how to get to where you want to go. You’re able to constantly check on your GPS to see if you’re still on the right track. When you make a wrong turn, it knows to make adjustments, and it points you back in the right direction.
A trading plan is your trading GPS. It will show you where you currently are as a trader and help you get to your destination: consistent profitability.
Traveling without a GPS wouldn’t be smart idea. You wouldn’t know how to get to your destination and it’s highly likely that you’ll drive around lost like a chicken with its head chopped off. You’re probably thinking that one could use an ancient object called “maps” instead, but we have no clue what that is. Please don’t make such absurd suggestions again.
Trading without a trading plan would be the same thing as driving without a GPS–a bad idea. You’re trying to get to this Promised Land called “Consistent Profits,” but since you have no way of knowing whether you’re headed in the right direction, you’ll most likely end up blowing out your account.
With a trading plan, you’re able to know if you’re headed in the right direction. You’ll have a framework to measure your trading performance. And just like a GPS, you’re able to monitor this continually.
This allows you trade with less emotion and stress.
Without a trading plan, this would be nearly impossible. Instead, you’d be a “cowboy trader“, shooting from the hip, trading by the seat of your pants, relying on your gut, guesses or signals from strangers. That ain’t trading – that’s gambling!
Whenever you trade, you’ll probably end up a nervous, emotional wreck, crying yourself to sleep as your rollercoaster account balance grinds at your psyche. (Okay pretty drastic, but we think you get the picture).
Just as you use a GPS to both figure out the route to be taken and to judge the progress that has been made, your trading plan defines how you’ll become consistently profitable and tells you if you’re on track.
Most importantly, if you suck at trading (and you certainly will in the beginning), you will know it is down to one of only two reasons: either there’s a problem in your trading plan or you are not sticking to your trading plan.
If you’re trading without a plan, it’s impossible to know what you’re doing right from wrong. You have no way to evaluate your results, so you’ll never know how to stop sucking.
We can’t emphasize this enough…
“If you fail to plan, then you’ve already planned to fail.”
Obviously, a trading plan doesn’t guarantee success, but a good plan that is followed will help you stay in the forex game longer than traders who don’t having a trading plan.
SURVIVAL is better than failure and it should be your first goal as a newbie trader.
Remember, 90% of new traders don’t make it. You want to be part of that special “10%” that does make it.
You’re probably thinking, “Ba humbug! Trading plan, schmading plan. I can be part of that 10% without a stinkin’ trading plan!”
It may be tempting to trade by the seat of your pants, but if you don’t develop clearly defined trading plans and be disciplined enough to follow them consistently, you’ll have much difficulty making consistent money as a trader.
Don’t take any chances. Have a trading plan.
Why Trading Discipline is the Key to Consistent Profitability
What’s wrong with deviating from your forex trading plan if you make a profit anyway?
Making an occasional winning trade, even when you throw your trading plan out the window, may provide short-term pleasure, but entering trades haphazardly can adversely influence your ability to maintain discipline in the long term.
Trading is a marathon, not a sprint!
When you stop following your trading plan, you become rewarded for lacking discipline and you may start believing that abandoning a trading plan is no big deal.
An unjustified reward may increase your tendency to abandon trading plans in the future. You may be prone to think “I was rewarded once, maybe I will be rewarded again. I’ll take a chance.” But the positive outcomes of undisciplined trading are usually short-lived, and a lack of discipline ultimately produces the long-term trading losses.
It’s important to distinguish justified wins from unjustified wins.
A justified win is when you create a very detailed trading plan and FOLLOW the plan. A win that results from following a trading plan is justified and reinforces discipline.
An unjustified win occurs when you make a plan but don’t follow it or if you have no plan at all. You might be rewarded, but the outcome occurred by chance.
You might as well flip a coin or hang a printed copy of your charts on the wall and throw darts at it to help you make trading decisions. The win is unjustified and can reinforce undisciplined trading.
Maintaining discipline is vital for consistent and profitable trading. Trading is a matter of getting the law of averages to work in your favor.
You trade proven forex trading strategies, over and over, so that across a series of trades, the strategies work enough to produce an overall profit. It’s like making shot after shot on the basketball court so as to accumulate a winning number of points. The more shots you take, the more likely you will amass points. Just look at Kobe Bryant or Kevin Durant.
The winning player is the person who first develops the skill to make the shot consistently, so that at every possible opportunity, the ball is likely to go through the basket. They’ve developed the skill to learn how to shoot the ball the same way every single time. Consistency is crucial!
It’s the same for trading. One must trade consistently, following a specific trading plan on each and every single trade. If you trade one approach this time, and a different approach at another time, your performance will more than likely be haphazard.
We can’t stress this enough…
You have to allow the law of averages to work in your favor, so that across a series of trades, you will make an overall profit.
If you follow the plan sometimes and abandon it at other times, you throw off the probabilities, and you will most likely end up losing overall.
With trading discipline comes profitability.
Don’t let unjustified wins interfere with your ability to maintain discipline. Follow your own trading plan, and cement in the mindset that if you follow your plan, you will end up more profitable in the long run.
Now that we’re done explaining how important a trading plan is (can we stress this enough?), it’s time for you to learn what should go inside a good trading plan.
How To Find A Trading Style That Suits Your Personality
The first step in building a trading plan is to realistically take a holistic view of yourself.
The foundation of your trading plan starts with your self-reflection because you will be the only one using it. This self-reflection will reveal your trader profile, which is basically who you are as a trader.
Who you are as a trader will define what kind of method suits you. Strategies, systems, and methods which aren’t compatible with your profile and personality will drastically lower your chances of success.
While most traders want to immediately jump into creating or finding trading systems and strategies, they won’t know which ones match their personality and unique situation if they don’t spend some time on self-reflection first.
Before you think about clicking the Buy or Sell button on your trading platform, there are some questions you should ask yourself so that you can better form your trading plan. While you’re at it, you should write down these answers. Writing down your answers will help remind you of what you’re going to do and help make sure you stick to the plan.
Now are you ready for some Q&A?
In the following sections, we’ll go through some questions that should make clearer what your trading profile is, and how it will shape your trading plan.
What is Your Motivation to Be a Forex Trader?
Is it to become filthy rich? Is it for the thrill? Is it because you want to do something challenging and exciting? Is it because the girl you like trades currencies and you want to impress her?
It is important to know what your true motivation is, or whether you should even be trading at all. Forex traders who aren’t serious or committed to the craft will be quickly eliminated by the market.
For example, seeking thrills and seeking consistent profits don’t go together. You might enjoy the thrill of putting on a humungous “I’m betting the farm” position, but believe us, you won’t be smiling once your trade blows up in your face.
If thrills are what you seek, go to a casino, jump out of a plane or try driving an F1 racing car.
Better yet, if you want a real thrill, drive an F1 racing car out of a plane and land in a casino. Now that’s a real thrill! And you might even lose less money than if you were trading.
What have you determined to be your goal(s) for trading?
This can be expressed monetarily using a profit goal (either in currency or percent return) per unit of time. For example, you might choose a goal like making $4,223,834,145.53 per month, or achieving a 529% return every week.
By making your goals specific and measurable, not only will you know what you really want, but you’ll be able to monitor your progress and see whether you are improving or not.
What Is Your Risk Capital? How Much Money Can You Afford To Lose?
You need to determine if you can even afford to trade.
Forex trading should only be done with risk capital.
Risk capital is money that you can lose.
This is the kind of money that if you lost, you wouldn’t lose your home, car, spouse, limbs, electricity, etc.
Don’t risk what you can’t afford to lose!
If you’re playing with money that you need to pay the bills, it will have a huge negative impact on your ability to make objective trading decisions.
Imagine how stressed you’ll be while your trade is open knowing you might not be able to put on the food on the table if you get stopped out.
You don’t want to end up starving, homeless, and broke now do you?
Unless you do.
In that case, go ahead and risk all your hard-earned money in forex.
Don’t be stupid!
If you can’t afford to make dough in the kitchen, then you can’t afford to make dough in the forex market.
Don’t start trading forex with real money until you’ve accumulated enough risk capital. Until then…
Stick to demo until you really know what you are getting into!
How Much Time Can You Dedicate To Forex Trading?
You need to seriously consider how much trading will affect your current lifestyle.
How much time each day/week/month (whichever is most appropriate) can you dedicate to the various requirements of forex trading and managing a trading system?
Your time availability will determine your trading style.
The shorter the timeframe you are trading, the more time you need in front of the charts.
If you’re a day trader, since you’re entering and exiting trades throughout the day, you need to be glued to the screen the whole time.
The longer the timeframe you trade, the less you have to watch the market. You can simply check your trade from time to time.
Because if you were an scalper, you’d probably missed a lot of entries and exits, and end up instead scalping your own head due to your many losses or missed winning opportunities.
You also need to dedicate time to developing AND tweaking your trading system. Trading your system will require you stare at charts looking for possible entries. Once you’re in a trade, you then need to manage it.
After you exit, you need time to review your trade and look for ways to improve. And then you need time to write everything you felt and did in your trading journal.
How much time you’ll need to accomplish all of this will depend on your trading system.
Naturally, your forex trading system needs to factor in how much time you can dedicate.
This is all assuming you only have ONE trading system.
You should repeat this process for every trading system you wish to trade.
Whatever “operating hours” you decide, just make sure you’re able to commit to it consistently.
Which Kind Of Returns Do You Expect To Make From Forex Trading?
Ahhh. Of course, anybody who’s interested in trading certainly has ambitions of raking in some dough. It make sense – trading involves risk, and we expect to be compensated for those risks.
There’s no doubt that every currency trader expects to make profit.
The question that you should ask yourself though is this:
What kind of returns do you expect to make?
Your answer to this question will play a huge role in determining what kind of trading style you will implement, what currency pairs and times you will trade, and most importantly, the risks involved in achieving your goals.
Let’s look at an example to help explain this better. Let’s say there are two forex traders, Bruce and Mike. Bruce is looking to score 10% a year while Mike is a little more ambitious – he wants to DOUBLE his account and make 100% returns
As you can imagine, a trader like Mike, who is looking to double his account, is in a very different situation.
It is very likely that Mike will have to take a lot more trades and/or risk more than Bruce. He will have to expose himself to more potential losses if he ever wants to achieve his goal of 100% returns.
A drawdown is normally calculated as the distance from the highest value of your account to next lowest point. (We’ll explain this a little bit more in a following lesson. For now, pay attention in class!)
Each forex trader must decide how big of a drawdown he or she can accept in order to hit their profit target goals.
On the one hand, there are forex traders who are risk averse and would rather have small drawdowns. The tradeoff is that this will also limit potential reward.
On the other hand, there are forex traders who are comfortable with large drawdowns, just as long as their system also yields huge returns.
You will also have to take into consideration how much time you can dedicate to trading. If you can’t dedicate a significant amount of time working on your system, reading up on the markets and learning new trading techniques, recording/reviewing your journal, then we can guarantee you that you will have a difficult time hitting your goals.
If you can’t make this time commitment, you may have to readjust your expectations as to how much you can make your account grow. We highly suggest that you check out Pipwcrawler’s thread about setting newbie expectations
In the end, just know that success depends on YOU.
Do you have the discipline to grind it out consistently to tweak your skills and gain the experience needed to navigate the markets?
If you don’t, then expect inconsistent returns, if any at all, over the long term.
What Is Your Daily Pre-Trading Routine?
What activities will you do BEFORE you start trading?
We don’t mean showering and brushing your teeth (although you should always take a shower and brush your teeth. You don’t wanna smell like Pipcrawler now do you?)
Your forex trading routine should help you accomplish the following tasks:
- Reviewing any open positions and making any necessary adjustments
- Reviewing yesterday’s trades
- Getting yourself “up to speed” on the market
- Identifying any upcoming news that could cause volatility
- Being ready to trade when the next trading session opens
Your pre-market routine will be critical to your success as a trader. It will help you plan your day so that you are not spending time during market hours scrambling trying to figure out what news or data will be coming out, and what to do if the market does something you didn’t expect.
You want to start your forex trading session feeling calm, relaxed, and prepared for whatever the market throws at you.
Keep up-to-date with both the fundamentals and technicals affecting the forex market.
Stick With Your Trading Plan
A forex trading plan is only effective if it’s followed. You have to stick to it. It sounds simple to do. It is really just common sense but most traders still can’t do it. Why, oh, why?
Trader incompatibility. A trading plan should be a personalized plan for you, a plan that fits your own goals, risk tolerances, and individual lifestyle. You must develop each component on an individual basis, never losing sight of the fact that it must be custom tailored to YOU and YOUR needs.
Your trading plan must be made based on reality, not on hope. If you’re simply trying to copy somebody else’s trading plan or yours is based on false assumptions, then you will not be compatible with it and will have trouble following it.
Solution: Be honest with yourself. Then revise your trading plan.
Trading plans are intended to be long-term. Many forex traders give up on their trading plan, or often more specifically, the trading system in the trading plan, after suffering a string of losses rather than sticking it out through the inevitable rough times.
Solution: Be patient!
No discipline: Trading according to a plan requires sticking to it through thick and thin. That takes discipline. Rock solid discipline. Forex traders lacking discipline do not stick to their trading plans. You need to be disciplined. Rock solid. Does it sound like we’re beating a dead horse? Well, good.
Solution: Stay disciplined!
Self-destructive behavior: Some forex traders have deeply ingrained psychological issues that will sabotage them. This can be resolved with hard work on one’s self, but the trader must be self-aware of such issues first. You can’t figure out a solution if you don’t know the root problem.
Solution: Look in the mirror. Hopefully you don’t turn to stone.
If you’re personally having trouble sticking to your trading plan, most likely it’s one of the reasons above. If it is, refer to the solution below it.
How To Create A Mechanical Trading System
So far, we’ve taught you how to develop your trading plan. We’ve also discussed how important it is for you to discover which type of forex trader you are.
Next, we’re gonna teach you how to add some meat to your thin trading plan frame by showing you how to create a forex trading system.
More specifically, we’re gonna teach you all about forex mechanical trading systems.
Mechanical trading systems are systems that generates trade signals for a trader to take. They are called mechanical because a trader will take the trade regardless of what is happening in the markets.
In theory, this should eliminate all biases and emotions in your trading, because you are supposed to follow the rules of your system NO MATTER WHAT.
If you do a simple search in Google for “forex trading systems” you’ll find many many many people out there who claim to have the “Holy Grail” system that you can purchase for “only” a few thousand dollars.
These systems supposedly make thousands of pips a week and never lose. They will show you supposed “results” of their perfect systems and it will make your eyeballs turn into dollar signs as you sit there and say to yourself, “Wow I can make all this money if I just give this guy $3,000. Besides, if his system making thousands of pips a week, I’ll be able to make my money back in no time.”
Slowww down cowboy. There are some things you should know before you give them your credit card number and make that impulse buy.
The truth is that many of these systems DO in fact work. The problem is that forex traders lack the discipline to follow the rules that go along with the system.
The second truth (Is there such thing as a second truth?) is that instead of paying thousands of dollars on a system, you can actually spend your time developing your own mechanical trading system for free, and use that money you were going to spend as capital for your forex trading account.
The third truth is that creating mechanical trading systems isn’t that difficult. What is difficult is following the rules that you set when you do develop your system.
There are many articles that sell systems, but we haven’t seen any that teach you how to create your own system.
This lesson will guide you through the steps you need to take to develop a forex mechanical trading system that is right for you. At the end of the lesson, we will give you an example of a system that one of the FX-Men uses just so we can show you how awesome we are! (Insert evil laugh here.)
Goals of your mechanical trading system
We know you’re saying, “DUH, the goal of my trading system is to make a billion dollars!”
While that is a wonderful goal, it’s not exactly the kind of goal that will make you a successful forex trader.
When developing your mechanical trading system, you want to achieve two very important goals:
- Your system should be able to identify trends as early as possible.
- Your system should be able to avoid you from whipsaws.
If you can accomplish those two goals with your trading system, you have a much better chance of being successful.
The hard part about those goals is that they contradict each other.
If you have a system who’s primary goals is to catch trends early, then you will probably get faked out many times.
On the other hand, if you have a mechanical trading system that focuses on avoiding whipsaws, then you will be late on many trades and will also probably miss out on a lot of trades.
Your task, when developing your mechanical trading system, is to find a compromise between the two goals. Find a way to identify trends early, but also find ways that will help you distinguish the fake signals from the real ones.
If you have no idea where to start, drop by our Free Forex Trading Systems thread in our forums. Tons of forex traders post their ideas for trading systems, so you may find one or two that you can use when you build your own mechanical trading system.
Design Your Trading System in 6 Steps
The main focus of this article is to guide you through the process of developing your own forex trading system. While it doesn’t take long to come up with a system, it does take some time to extensively test it. So be patient; in the long run, a good forex trading system can potentially make you a lot of money.
Step 1: Time Frame
The first thing you need to decide when creating your system is what kind of forex trader you are.
This will help determine which time frame you will use to trade. Even though you will still look at multiple time frames, this will be the main time frame you will use when looking for a trade signal.
Step 2: Find indicators that help identify a new trend.
Since one of our goals is to identify trends as early as possible, we should use indicators that can accomplish this. Moving averages are one of the most popular indicators that traders use to help them identify a trend.
Specifically, they will use two moving averages (one slow and one fast) and wait until the fast one crosses over or under the slow one. This is the basis for what’s known as a “moving average crossover” system.
In its simplest form, moving average crossovers are the fastest ways to identify new trends. It is also the easiest way to spot a new trend.
Of course there are many other ways forex traders spot trends, but moving averages are one of the easiest to use.
Step 3: Find indicators that help CONFIRM the trend.
Our second goal for our system is to have the ability to avoid whipsaws, meaning that we don’t want to be caught in a “false” trend. The way we do this is by making sure that when we see a signal for a new trend, we can confirm it by using other indicators.
There are many good indicators for confirming trends, but Pipsurfer really likes MACD, Stochastic, and RSI. As you become more familiar with various indicators, you will find ones that you prefer over others, and can incorporate those into your system.
Step 4: Define Your Risk
When developing your forex trading system, it is very important that you define how much you are willing to lose on each trade. Not many people like to talk about losing, but in actuality, a good trader thinks about what he or she could potentially lose BEFORE thinking about how much he or she can win.
The amount you are willing to lose will be different than everyone else. You have to decide how much room is enough to give your trade some breathing space, but at the same time, not risk too much on one trade. You’ll learn more about money management in a later lesson. Money management plays a big role in how much you should risk in a single trade.
Step 5: Define Entries & Exits
Once you define how much you are willing to lose on a trade, your next step is to find out where you will enter and exit a trade in order to get the most profit.
Some people like to enter as soon as all of their indicators match up and give a good signal, even if the candle hasn’t closed. Others like to wait until the close of the candle.
It’s all really just a matter of trading style. Some people are more aggressive than others and you will eventually find out what kind of trader you are.
For exits, you have a few different options. One way is to trail your stop, meaning that if the price moves in your favor by ‘X’ amount, you move your stop by ‘X’ amount.
Another way to exit is to have a set target, and exit when the price hits that target. How you calculate your target is up to you. Some people choose support and resistance levels as their targets.
Others just choose to go for the same amount of pips on every trade. However you decide to calculate your target, just make sure you stick with it. Never exit early no matter what happens.
Stick to your trading system!
After all, YOU developed it!
One more way you can exit is to have a set of criteria that, when met, would signal you to exit. For example, you could make it a rule that if your indicators happen to reverse to a certain level, you would then exit out of the trade.
Step 6: Write down your system rules and FOLLOW IT!
This is the most important step of creating your trading system. You MUST write your trading system rules down and ALWAYS follow it.
Discipline is one of the most important characteristics a trader must have, so you must always remember to stick to your system! No system will ever work for you if you don’t stick to the rules, so remember to be disciplined.
Oh yeah, did we mention you should ALWAYS stick to your rules?
How to Test Your Forex Trading System
The fastest way to test your system is to find a charting software package where you can go back in time and move the chart forward one candle at a time. When you move your chart forward one candle at a time, you can follow your trading system rules and take your trades accordingly.
Record your trading record, and BE HONEST with yourself! Record your wins, losses, average win, and average loss. If you are happy with your results then you can go on to the next stage of testing: trading live on a demo account.
Trade your new system live on a demo account for at least two months. This will give you a feel for how you can trade your system when the market is moving. Trust us, it is very different trading live than when you’re backtesting.
After two months of trading live on a demo account, you will see if your system can truly stand its ground in the market. If you are still getting good results, then you can choose to trade your system live on a REAL account.
At this point, you should feel very confident with your forex trading system and feel comfortable taking trades with no hesitation.
Build Your Trading System in 6 Steps
In this section we’ll give you a rough picture of what a trading system should look like. This should give you an idea of what you should be looking for when you develop your own forex trading system.
Enter long if:
- The 5 SMA crosses above the 10 SMA and both Stochastic lines are heading up (do not enter if the Stochastic lines are already in the overbought territory)
- RSI is greater than 50
Enter short if:
- The 5 SMA crosses below the 10 SMA and both Stochastic lines are heading down AND (do not enter if the Stochastic lines are already in oversold territory)
- RSI is less than 50
- Exit when the 5 SMA crosses the 10 SMA in the opposite direction of your trade OR if RSI crosses back to 50
- Exit when trade hits stop loss of 100 pips
Okay, let’s take a look at some charts and see this baby in action…
As you can see, we have all the components of a good forex trading system.
The Stochastic help us determine if it’s still ok for us to enter a trade after a moving average crossover, and it also helps us avoid oversold and overbought areas. The RSI is an extra confirmation tool that helps us determine the strength of our trend.
After figuring out our trade setup, we then determined our risk for each trade. For this system, we are willing to risk 100 pips on each trade. Usually, the higher the time frame, the more pips you should be willing to risk because your gains will typically be larger than if you were to trade on a smaller time frame.
Next, we clearly defined our entry and exit rules. At this point, we would begin the testing phase by starting with manual back tests.
Here’s an example of a long trade setup:
If we went back in time and looked at this chart, we would see that according to our system rules, this would be a good time to go long.
To backtest, you would write down at what price you would’ve entered, your stop loss, and your exit strategy. Then you would move the chart one candle at a time to see how the trade unfolds.
In this particular case, you would’ve made some decent pips! You could’ve bought yourself something nice after this trade!
You can see that when the moving averages cross in the opposite direction, it was a good time for us to exit. Of course, not all your trades will look this sexy. Some will look like ugly heifers, but you should always remember to stay disciplined and stick to your trading system rules.
Here’s an example of a short entry order for the “So Easy It’s Ridiculous” system.
We can see that our criteria is met, as there was a moving average crossover, the Stochastic was showing downward momentum and not yet in oversold territory, and RSI was less than 50.
At this point we would enter short. Now we would record our entry price, our stop loss and exit strategy, and then move the chart forward one candle at a time to see what happens.
We know you’re probably thinking that this system is too simple to be profitable. Well the truth is that it is simple. You shouldn’t be scared of something that’s simple.
In fact, there is an acronym that you will often see in the trading world called KISS.
It stands for Keep It Simple Stupid!
It basically means that forex trading systems don’t have to be complicated. You don’t have to have a zillion indicators on your chart. In fact, keeping it simple will give you less of a headache.
The most important thing is discipline. We can’t stress it enough. Well, yes we can.
YOU MUST ALWAYS STICK TO YOUR TRADING SYSTEM RULES!
If you have tested your forex system thoroughly through back testing and by trading it live on a demo for at least 2 months, then you should feel confident enough to know that as long as you follow your rules, you will end up profitable in the long run.
Trust your system and trust yourself!