Forex traders often have times where they can not find a single Forex system that makes money. As they continue looking for system, they start getting a good idea of what works and which type of trading systems produce results. There is however, a different approach whereby ANY forex trading system can be made more efficient and over 90% of systems profitable.
90% of all trading systems can be optimised to be profitable. This process is however, not easy and requires some trading experience, knowledge, expertise and creativity. This approach is not for the lazy trader who is trying to find a "plug and play" solution. 90% of trading systems available on the market today are merely under optimized. Only a little more will be required from the trader to make them profitable. This process often leads to the conclusion that it is not the trading system that creates successful traders. It is the trader with a thorough approach that creates good trading systems for themselves. They therefore own the system 100%. Failing traders in general do not have a positive approach or the knowledge to stick with or fix a reasonable system. They would rather move on to someone else's sub optimised system. They never fully own the system they are trading because they have not optimised it or have not really understood the strengths and weaknesses of the system. They would rather trade it with the default settings and hope for the best. This sometimes works in the short term.
The sad fact is that almost all trading systems (90%) can be made more profitable very, very easily. There are a number of techniques to do this. Below are a few that may give you food for thought.
Reversing the trading direction on an unsuccessful or disastrous trading technique can produce good results. Some Forex tradin techniques look like suicide. That it will produce unacceptable losses all the time. Why not be brave and simply reverse the trade direction on all deals. This simplistic approach has turned some real dog systems into winners. This work particularly well when the stops and targets are the same size.
Optimising the settings of the existing trading system will teach you the strengths and weaknesses of a system. Most system have variables and the system results can be optimised by find the best settings, time span, currency, stops, targets etc for a system. With the ability to turn most systems into trading robots this is very easy to do. In general changing the size of stops and targets alone can produce amazing results.
Introducing a filter to the existing trading system can improve results dramatically. A trading filter either improves the systems chances of success or eliminates the negative deals. It can be an additional indicator or additional information that must be taken into account before trading. A filter can therefore be an indicator, only trading at a certain time of day, only trading under certain volume conditions, only trading in trending or sideways markets, not trading near major announcements, using the relative strength of currencies when compared to each other, etc. Using multiple timespan confirmations eliminate many doubtful trades.
Introducing the appropriate money management and position sizing approach can make an unsuccessful technique profitable. You always want to increase your risk in winning streaks and decrease your risk in loosing streaks. You can make money with a poor technique that has clear winning and losing streaks.
This process of optimising systems is fun and educational. It adds a lot of enjoyment to Forex trading. So many traders spend a disproportionate amount of time trying to find the absolutely perfect Forex trading entry technique. They waste so much time chasing the evasive Holy Grail. Some never stop this search for perfection in this less than perfect Forex market. Some never stop to consider being creative and fixing what they've got.
In all of this, the most reliable systems are often the simplest ones. After all you only need a tiny edge over the market to make money. Trading basic horizontal and non horizontal support and resistance principles, taking market phases into account, using momentum appropriately, sizing your targets and stops well, and managing your risk through good position sizing plan is all it really takes. Forex trading can be so much fun when this happens.
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