Quick tips to design your own trading system, if you are planning to learn Forex with the goal to become a successful trader around, it is essential for you to know the best trading system that works for you. Forex trading system itself refers to a technique used by a trader to help him or her on deciding whether to purchase or sell currency pairs in certain period of time. 

How to Design your Own Trading System in 6 Steps

Instead of using other’s trading system which may not always work with your trading personality and need, you may think of coming up with your own system. It may take time for you to make sure that it works. But, keep it in mind that good trading system can create much money in the future. Here are some steps to follow for designing trading system.

Step 1: Time Frame

First of all, you have to determine when designing your own trading system is determining what kind of trader you are in the Forex market. Are you a swing or a day trader in nature? Do you like watching over the charts each day, every week or every month? Ask this question to yourself to decide on which frame to use. 

Step 2: Discover Indicators for New Trend

In Forex trading, one of your goals will be identifying new trends as early as possible. To make it possible, you will need indicators. Moving averages become one of the most famous parameters which traders employ to assist them identify a new trend easily. Particularly, they will employ two moving averages until the quick one crosses under or over the slow one.

Step 3: Find Indicators to Confirm Trend

In addition to the parameters to identify a new trend, you need a parameter that helps you to confirm the trend as well. This is important to help you avoid whipsaws or being caught in a “false” trend. It can help you to indicate a signal for a trend. Nowadays, you can find some good indicators to confirm trends in the internet. 

Step 4: Characterize Your Risk

When designing your own Forex trading system, it is also essential to define how much you can afford to lose on every trade. Not all people can talk about losing because it is just a bad thing none wants to face. However, good traders should think about what they can potentially lose before considering how much they can win. So, try to think about it.

Step 5: Identify Entries and Exits

Next, you need to discover where you are going to enter and exit a trade so that you can maximize your profit in the market. Some experts recommend that waiting until a candle shuts is a good way to enter the market. When it comes to the exit, there are some distinct choices that you can take. One way is to follow your stop.

Step 6: Write Down the System and Follow It!

It will be the most crucial part of your way on designing a trading system: write it and follow it! At this point, discipline will be one of the most essential characteristics that you as a trader need to have. That’s why you must always keep in mind to stick on your trading system. Remember that no system will work if you don’t follow it.

Finally, you can start to create your own trading system by following a few simple steps above. Don’t forget to test your Forex trading system before you use it in live trading. After all, you shouldn’t forget to keep learn Forex to upgrade yourself with any change in the Forex market. Consider following some Forex webinars, seminars and trainings.