The methods for trading forex are based on several indicators and formulas to spot the best price zones to buy or sell a currency in different timeframes. A forex system may be supported by a series of signals and chats analysis, other technical tools and fundamental information can also be used to improve the day trader performance. Forex predictions are based on past performance of the markets and then we can anticipate a market move to be long or short at any given time.
Trading systems can be automated by computer algorithms or executed manually by the trader. The manual trading is more tedious because you have to remain in front of your computer, searching for signals and chart patterns to make the decisions. The automated system is made by programmers, a software reads the price and charts to convert them in to buy and sell signals. In the automated trading, the emotions are removed but the personal feeling is lost.
A lot of traders look for the “holy grail” to make a lot of money without a single loss, but there is not such thing. Some signals and systems help us to be profitable, with wins and losses, so we have to decide which one to use in a daily bais. Be sure that you can be in green numbers overall, this profit will make you more comfortable in the markets, and this confidence is the main key to success.
Some sites and forums specialize in trade alerts, some traders with experience give some guidance to the general public on what to invest and when to do it. You can receive these trades via email, sms or ever directly to your trading platform, the common practice is that sites charge a suscription for these signals. Several of these services are expensive and almost non of them is profitable, nobody can manage your money better than you, just be patient and learn how to read the markets and you are done.
The main goal of a forex trading system is to find and spot the main trend of the market and based on that trend, decide what to do. As traders, we have to be focus in the price action and be aware of the rules we are following, we have to make a plan and sick to it, leave the greed and fear apart from your trading emotions. If you achieve this emotional free mind when you are in the markets, you have more chance to have constant profits.
Important factors in a forex trading system are the time frame, indicators, risk, entry and exit prices. These factors have to be in the action plan before each trade, this way we increase the probabilities to earn money in every day. Remember, never start a day without a plan, this will be your guide, this strategy can be the difference between a losing and a winning day.
The best way to test your system is to open a demo account with a respected broker, before you risk your money, and remember nerver risk any ammount you are not willing to lose. Remember that only 5% of the traders make money, the rest lose their capital, the main winners are the banks and the big market makers, practice until you are an expert, I have a rule to double a demo account three times before going live with real money.
You have to be sure that your broker is legitimate and legally established, a lot of them are scammers so this decision is one of the most important you will make in your trading life, so be sure you make an adecuate benchmark.
I did my benchmank and decided to go with Alpari, it’s a well known broker and it’s estblished in several countries around the world, they use metatrader 4 and metatrader 5 platforms, you even can open an account in cents, so for example $50 usd are 5,000 usc, this way you can test with small amounts and have more room to make tries.