Trading forex could be rough at times and it might keep you in a state of questioning your approach toward it.
To be on a safer side, it is best advised that your know this ‘’your trading system is not a permanent tool to rely on forever’’
Still on this, most of us traders think of the trading system as a permanent instrument to trade forex, which is very wrong.
But have you forgotten that there are lots of factors that came into play when you are developing the trading strategy? Which one of them are the Market conditions.
Generally, market conditions are not always constant; they are very volatile, which is the more reason why your trading system can’t be guaranteed to be a perfect one.
Do you in any way doubt your trading strategy? Or maybe it’s no longer giving you that confidence you use to have on it? OR perharps it’s (trading system) failing you consistently; then, I’ll advice you do as follows:
Note: In other to reduce cost and regret, experiment the tips below on a Demo account
#1 Try your trading system with another currency pair:
Oh! But it’s failing.
How can I try a failing trading system with another pair?
Of course you can.
Initially, you developed your TS for your loved currency pair, but now due to some variations in the currency market, your prior TS no longer works for your pair. In other word the trading system cannot guarantee you an effective analysis of your prior currency pair.
However, this same TS can still work on another currency pair.
Here are some factors that can prevent the continuous trend use of your TS (trading system) on your beloved your currency pair are:
–Supply and Demand
–Government policies (Fiscal and monetary policies)
–International Exchange of goods and services between countries.
They all play significant role that can regulate the market, which could alter your result when used without considering changes before trading your pair.
Apparently, this same approach might still work for another currency pair whose behavior still agrees with the system.
For instance, if you’ve always stick to a particular pair, let’s say for EUR/USD and it’s not working, you might try the system on JPY/USD.
Note: since your TS no longer compact with your prior currency pair, it does not mean it will definitely work for another. But if the behavior of the new pair is in agreement with the trading system, it’ll work.
# 2 Change to a higher time frame.
Yeah, if you’re previously using a short time frame for your TS and you discovered that it is not responding as usual, it’s high time you test it with a higher time frame.
In some situations, when you trade on a lower time frame chart, you are lowering your probability of making profits.
According to a forex coach Nial Fuller, In one of his lessons, he stated this;
‘’ The reality of the situation is that the lower in time frame, the less accurate any trade setup becomes. Therefore, when trading on lower time frame charts, you are lowering the probability that any trade you take will be a winner by adding more variables to the equation of forex trading.’’
So, if you start experiencing a discontinuous or rough result that is degrading your trading system on a lower time frame, change to a higher one.
#3 Its time to twit your profit and loss parameter moderately.
This is the point where you have to cut your greed so as not to regret your actions. One sure-ways to adjust your failing system is to moderately twit or adjust your TP and SL.
Note: It is wrong for a trader to extend his or her stops when trading, by ignoring the normality ratio of his risk and gain.
You are definitely in forex trading to make money, which is the more reason why you don’t have to do funny things that will cost you your portfolio.
So, if you really want to make winning out of your trade, it’s very important that you balance your risk/gains ratio by adjusting your take profit and stop loss wisely.
#4 Use only the necessary indicators:
Recently, it is revealed that most trading systems are built on many indicators. However, most of these indicators lead to some serious complications.
If you are very conscious of your trade, you must have been wondering what made you won or lose the trade.
Still on that, due to the large numbers of indicators use, you might find it hard discovering the root of your success or failure on the trade.
But when you are in this situation, the best approach of making this adjustment is to start reducing your indicators one after the other and test their results.
With that, you can easily point out the pillars of your trading systems.
After you’ve already tried all these adjustment and changes on your trading system and get no positive result, then, it highly advisable that you acknowledge the fact that it does not work and develop a new one.
When you remember all the time spent on developing the trading system, you find it hard to do away with it.
But you just have to let it go and develop a better one, which requires your full focus and undivided attention.
Forex trading is a very volatile business, don’t joke with it, always face and handle it with your total self.
Conclusion: The success of your trading system depends on how well- the rules biding your trading system are executed. You have to spend time to enhance your TS, in other to manage risk and increase your winnings.
Always trade responsibly