Having a reliable trading system is a dream for every trader no matter if he is a forex master or just a beginner. Everybody understands the importance of the right choice for a future success. So what system can be called “reliable”? It is the one which has a lot of users with real reviews, its progress is predictable while risks are minimized. Also, such system should immediately react to all trends. Trend-following systems are preferable because each trend will be established for some time. If you decided to use such system, pay a particular attention to entry and exit points of positions.
Being in search of the “Ideal” entry
The main problem for all beginners in trading is that they are trying to find a perfect entry point and waste so much time doing it. The result is predictable – disappointment and weariness because of all the technical instruments which help to estimate all the possibilities. It is absolutely useless if you don’t follow the trends and become one of the first who notices the tendency on the stage of establishment. Newcomers can be called “experienced” after they have learned how to do this, how to notice trends, for example, high-probability reversal patterns.
These are the well-known trends such as Triple Top, Double Bottom, Head and Shoulders, etc. You can see them on price charts but there is one more important thing that should be said. The common mistake for beginners devoted to the reversal patterns is looking for a reversal at first, but not identifying the tendency.
Loss Limitation for Safety
Let’s talk about one more point – the trader’s money protecting. If you use a serious system, this feature must be there. Stop-loss considered being one of the ways of providing safety. There is a stop-loss, which foremost triggers the entry, it is called “initial” and founded on the correlative reversal.
To enter the market quickly an initial stop-loss is needed. It can be found at the top of a reversal pattern.
However, if we are talking about a long entry, there is a need of placing an initial stop-loss to a lower part of the reversal formation.
After all, stop-loss is considered to be a protector for any trader, it should prevent any unforeseen price changes.
Lock In Profits
Profitability is a very important point which shows the main difference between a newcomer and a forex pro. While first is searching for the best way of entering the market, the second follows all new methods and ways for increasing take-profit.
This approach is exactly what is necessary for getting rich in a short time because profitability is based on the moving in the opposite direction.
When there is no reason staying in the market, all open positions start to close and all possible profits become locked in. This feature on the price chart is not widespread enough, so you can’t rely on it and it is a problem. Such approach considers drafting on funds and it can be counted as another drawback. Why is it dangerous? First of all, it is not good for a trader’s psychological condition.
Traders use other different techniques. One of them helps to decrease drawdown. “Trailing stop-loss” based on the automatic adjustment to the trend’s moving direction. Of course, the profits with this approach will be smaller but it does not matter comparing to disadvantages of closing the whole position at the reversal in the opposite direction.
One more way is to set the predictable levels of profits and to block them. For measuring these levels traders usually use Fibonacci levels (1.618, 2.618 and 4.236), but there are a lot of other methods. Fibonacci follow the same goal as the previous method – by lessening the profits to ease drawdown and not to influence badly on trader’s psychological condition.
Every trader needs a reliable system for making money online. This system should follow the trends and have clear ways how to entry and exit. Stop-loss is an initial thing for being set because it can save traders and especially beginners from losing profits.
One more important feature is take-profit as it is the thing which will not only save a trader in a good psychological condition but allow getting more money managing drawdown.
If you choose between profits and safety, pay attention to the second. Our markets are very unpredictable and change every day, a reliable system will provide you with a smaller number of risks.
Remember that increasing your capital is the most important thing and you should do everything to achieve this goal. Opportunities in the trading markets are unlimited and there is always a place for you.