During previous tutorials we learnt how to make trades, studied methods of technical analysis, and elaborated on the main indices of fundamental analysis. Every trader has to be aware of these basic principles in order to analyze and understand any financial market. However, in many cases it is not enough. It is common that different investors with similar backgrounds implement the same systems and indicators, watch and read the same information, but some quit trading in a few months while others stay in the market and become successful. So, what exactly helps traders make money? What do they spot on charts and why do they make progress? There is no secret at all. Every trader just develops his own trading system It is the trading systems that we are going to deal with in this tutorial.
A trading system is the result of a trader’s experience, hard work, and knowledge.
Designing a proper trading system comes at a high price. It involves days and nights spent at a computer, critical analysis of past mistakes and the heart you put into it. However, the result is an individual trading system which is a secret formula of success. Two identical systems do not exist. Every trader has certain tools and techniques. He can share them with other traders but will be unable to explain all the details and intricacies of his own view on the market. That is why it is necessary to design a system of your own from the very beginning, from your first steps in trading. If you decided to become a professional trader and trade in the market steadily, efficiently, and for a long time, you need to create an individual trading system. Today there are a lot of books where famous traders reveal their secrets and give examples of trading systems which helped them achieve success in their careers. You may find very useful to learn from their experience and follow their advice. But keep in mind that it will not have the desired effect if you follow those systems blindly. You need to dig up the core idea which will help you design a unique trading system.
A trading system is a blend of several important components.
It can be compared to a mechanism. Even if a single cog in the machine is removed, the machine will malfunction or stop working. The same applies to a trading system. If you add up a wrong component, all your work would be for nothing. A system has to be adjusted carefully and customized. Besides, a trading system is not permanent, you must constantly monitor and streamline it. At the same time, a system must minimize risks and ensure maximum accuracy of forecasts. A trading system is a precise calculation, a balance point between several unknown and constantly changing factors. It is extremely important to get the priorities straight, diversify risks, calculate entry and exit points and choose analytical tools.
A trading system is a set of strict rules that determine price levels, time, and conditions for entering and exiting the market.
A trader with an elaborated trading system is always ready for any development on the market. Every minute the trader can tell what exactly he is going to do or avoid doing with a certain currency in the market. If he cannot tell for sure, he did not learn to understand the signals provided by the trading system, which is unacceptable. Steady profits are the only measure of the system’s efficiency. As we have already mentioned, a trading system is a set of rules, which stipulate the steps you should take after some important factors have influenced financial markets. More specifically, the system reflects overall results of fundamental and technical analysis, risk management, and capital allocation. An application of a trading system is called a trading plan.
A trading system is the result of a trader’s experience, hard work, and knowledge.
Designing a proper trading system comes at a high price. It involves days and nights spent at a computer, critical analysis of past mistakes and the heart you put into it. However, the result is an individual trading system which is a secret formula of success. Two identical systems do not exist. Every trader has certain tools and techniques. He can share them with other traders but will be unable to explain all the details and intricacies of his own view on the market. That is why it is necessary to design a system of your own from the very beginning, from your first steps in trading. If you decided to become a professional trader and trade in the market steadily, efficiently, and for a long time, you need to create an individual trading system. Today there are a lot of books where famous traders reveal their secrets and give examples of trading systems which helped them achieve success in their careers. You may find very useful to learn from their experience and follow their advice. But keep in mind that it will not have the desired effect if you follow those systems blindly. You need to dig up the core idea which will help you design a unique trading system.
A trading system is a blend of several important components.
It can be compared to a mechanism. Even if a single cog in the machine is removed, the machine will malfunction or stop working. The same applies to a trading system. If you add up a wrong component, all your work would be for nothing. A system has to be adjusted carefully and customized. Besides, a trading system is not permanent, you must constantly monitor and streamline it. At the same time, a system must minimize risks and ensure maximum accuracy of forecasts. A trading system is a precise calculation, a balance point between several unknown and constantly changing factors. It is extremely important to get the priorities straight, diversify risks, calculate entry and exit points and choose analytical tools.
A trading system is a set of strict rules that determine price levels, time, and conditions for entering and exiting the market.
A trader with an elaborated trading system is always ready for any development on the market. Every minute the trader can tell what exactly he is going to do or avoid doing with a certain currency in the market. If he cannot tell for sure, he did not learn to understand the signals provided by the trading system, which is unacceptable. Steady profits are the only measure of the system’s efficiency. As we have already mentioned, a trading system is a set of rules, which stipulate the steps you should take after some important factors have influenced financial markets. More specifically, the system reflects overall results of fundamental and technical analysis, risk management, and capital allocation. An application of a trading system is called a trading plan.
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