Selecting A Successful Forex Trading System

Selecting A Successful Forex Trading System

The purpose of a forex trading system is to remove the randomness and impulsivity of trading based on “gut feelings” and biased perceptions of the market. By relying on a previously constructed set of analytical indicators forex traders are able to remove a significant portion of emotional error and faulty reasoning from the trading process. When selecting a successful forex trading system it is important to focus on a few key points.

Personality Compatibility

Forex trading is an inherently risky investment vehicle. However, it is important that potential traders design or select a system that best mirrors their personal preferences and general personality with regards to risk level. A system with an incompatible level of risk will leave a trader feeling constantly dissatisfied with the system.

Currency Pairs

Traders should select a system which utilizes a currency pair that reflects their current level of market mastery and trading goals. Selecting a personally compatible currency pair ensures a higher likelihood of long-term trading success.

Broker Selection

A forex broker can provide a trader with trading advice, explanation of market trends, or technical assistance regarding regulations and market functionality. However, in the case of an execution-only broker, they can also function as little more than a link between the trader and the market in which they are interested. The correct trading system will contain a level of broker involvement relevant to the individual traders personal goals and current needs.