Jul

31

2010

Forex Market: Trading With Your Own Forex System

Published by Author in category Finance | Leave a Comment

Let’s create system which will allow you earning money. The statistics is required to us. Any – positive or negative – would be authentic. Not less than 300 supervision within 3-5 months, depending on a financial market. The increase in number of supervision and duration of test only is paid compliments.

Let’s advance the first indicator, K1: a parity of positive and negative bargains at system use, for example, 0.4. This figure shows that in four cases from ten your forecast comes true. Not so good result, but consequently it is necessary to work with it. Any figure if only it was authentic suits. Whether there will be it 0.8 or 0.1 – now it has no significance.

Loss restriction is necessary, differently losses can be irreversible. The choice of stop loss depends on a method of your trade (day, swing – or item trading) and from volatility of derivative instrument in the given range of time. Stop-loss should not be too small, and it is better to express in monetary units. For example, $500. We will add to this the size of average costs on trade (in recalculation on one transaction): commissions, lease, the equipment etc. at us are now the second important indicator – factor of losses K2. We will assume, in money terms it will constitute $550.

If you aspire, that your operations on financial markets, at least, were break-even, profit for which it is necessary to expect at an input in the market, cannot be more low (550 х 0.6): 0.4 = $825.

The trading system is constructed. Check up it on a demo and if it works, pass to a real account. Open items and wait. Wait, while stop-loss or profit will be executed. Or – or. Any actions! Simply wait for warrant performance. On your party probability and a population mean.

It is necessary to remember that conditions on financial markets constantly vary, and any system can give failure. Not terribly. It is necessary to observe the following rule. Three failures successively, and you leave the market for the term of not less than 2-3 weeks for rest and the event analysis. A repeated series of failures will require creation of new system. Experiment! On financial markets it is hard to achieve stable results, but it is possible to some. At creation of individual trading systems demos and educational trading accounts are very useful.

The relation to another’s trading systems should be extremely cautious. In one company operating on the American share market, I saw the system based on fluctuations of volatility of movement of two shares. The system principle was simple. Two shares having mutual influence against each other get out, and graphic change of the prices in a certain range of time coincides (symmetrically). By means of factor of cost of packages of each share are leveled. One is purchased, other is sold.

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