The whole point of trading FX is to make profits. To procure profits, one has to determine the buying and selling points properly. And to do that accurately, a sound, reliable and simple profitable Forex system is quintessential.
These trading systems can either be algorithmic or manual and their choice depends on the skill and convenience of a trader. The good news is that there are no shortages of choices and depending on their own style and requirement, traders can make their selection. However, with so many options around, there arises the problem of confusion.
To help 1st timers, here are some tips to select effective, profitable Forex systems.
It is the very 1st criterion which traders should look for when selecting a simple profitable Forex system. This mainly accounts for the average win size in comparison to its loss volume. One will come across systems which show a high ratio proportion for implying its trustworthiness and robustness. However, traders should always check the figure of Gain and Loss ratio.
For example – If the Gain-Loss proportion multiplied by the ‘Winning-Losing trades’ ratio of the system is more than one, then that is a countable system. If one finds the ratio to be 2 or even 3, then it means that particular trading system is quite good rather than being marginally good.
Consistency of the system is another important criterion which traders need to keep in mind. If a trader does manage to find one, then there’s nothing like it. Amid so many simple profitable Forex systems, one good way to find an analytical approach which will consistently deliver results is checking reviews on FX forums and catering to user feedbacks. From that list, shortlist a few names and run some tests with a combination of vivid indicators.
Trade with it for quarterly or half a year period and examine its constancy. Go for that system which deems appropriate.
FX experts always emphasize the importance of backtesting trades. This is one way of refining a strategy and making it ready for extreme market volatility.
Example – Some simple profitable Forex systems present a drawdown of 20% (calculated as $2,000 of a sum float of $10,000). In many ways, this is the aspect which one needs to be aware of. With the help of this drawdown, one can compare the system and also determine the amount which one will need to start trading with.
Lastly, when selecting a simple profitable Forex system, one should also check if the system is compatible with popular mobile OS. That itself serves plenty of perks, particularly for those who don’t consider FX as their primary source of income.
Example – Say if one has a flight and on that very day, the USD fell in price due to a change in the Consumer Price Index. That means the currencies exchanging with USD will also experience fluctuations in price. If someone is trading with USD as their primary currency, they can simply use their phone to log in and adjust their trade positions accordingly. This is the liberty a mobile responsive FX trading system gives.
These are some crucial tips to consider when choosing a simple profitable Forex System. Use them well to find a system and secure profits.
Happy FX Trading!
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.