The activity of traders in the foreign exchange market can’t handle stable rules of conducting trading operations. Therefore, the trading system is the same set of rules by which traders objectively assess the signals of the foreign exchange market for the subsequent entry to the market and the opening/closing of trading positions.
In a broader sense, the trading system is a set of tools used to conduct trading operations. These include: indicators of trade signals, methods of graphical analysis, oscillators and others.
The tools choice for the trading system shouldn’t be mindless mechanical. All the used tools must add each other and correlate the joint work in order to obtain the best quality signals for trading operations. The set of applied tools and methods of analysis should serve the only purpose - to give an objective assessment of the current market trend with the indication of the probability of obtaining a high profit with a minimum degree of risk.
It is important to understand that there is no universal trading system that can satisfy the needs of all traders without exception. A truly high-quality trading system is an individual set of trading instruments that facilitate operations on the foreign exchange market.
How do the time costs affect on the choice of the trading system?
Particularly, the choice of the trading system directly reflects the trader's ability to spend a certain amount of time on trading operations.
If you have the opportunity to spend at the computer round the clock, then scalping and intraday trading will perfectly suit your purposes.
Those who are able to devote a small amount of time to trading, should think about developing such system that will cover the daily interval and short-term transactions. Or maybe it is worth paying attention to medium and long-term transactions.
As a rule, the size of the current deposit directly influences the choice of the time interval for conducting trade operations. With a small amount of capital, it is impossible to trade, open and close transactions in the medium and long term. Simply, the lack of financial opportunities will affect, no matter what the large leverage you have chosen.
It is difficult to understand, but the obligatory factor in the work of any trader is the cost of diversifying transactions. Your trading system should be built taking into account the fact that risks are inevitable and sometimes losing trades are a normal circumstance with a high level of activity of the currency market at different stages of the current trend change.
Trading system groupsseparation
1. Mechanical trading system
All operations for opening/closing transactions are carried out by the trader automatically, based on tips from selected instruments. The work process acquires the features of the mechanism that operates in a clear and coherent way.
To achieve this result, you must pre-run the selected trading system on the demo account and check the history of completed transactions.
The mechanical trading system is great for novice traders and for those who are not too sure about the speed of their value judgments. That is, it is inclined to make erroneous conclusions based on the primary data. What is called - strong behind the mind.
2. Analytical trading system
A trader does not only make trades through the tools at his disposal, but also by applying analysis charts and techniques for prospective forecasting. We don’t blindly trust to trade signals coming from indicators, but we also focus on information from external sources. In such trading system, the trader independently selects the most optimal set of tools and analytical tools for completing trade transactions.
What is the best trading system?
It was mentioned that there are no universal trading systems that can approach everything without exception. It is important to understand that the best trading system is one that suits you best for comfortable work in the foreign exchange market. Focus on the fact that the simpler the system and the fewer rules that need to be observed, the easier it is to work in the foreign exchange market.Getting a profit from each transaction is the cherished dream of any trader. But, it is important to understand that without restrictive measures you can become bankrupt more quickly than a successful trader. The more reasonable rules restricting all kinds of risks, the easier it is to vary with a sharp change in the market trend.