Lesson 10: How to get stable returns for your forex account

Published 17.11.2014 at 12.54 AM.

 

I’ve noticed many times that analysis of future price behavior upon opening a deal becomes subjective. We unconsciously filter out unfavorable scenarios even if our trading system signals a high win-rate of 70%. The thing is that we start trading our wishes and ignore the signals showing alternative price movement scenario.

There is no single solution to this problem, but we can smooth the effect of opened trades on price forecasting. There is a simple way: right after entering the market, close your trading platform. But don’t forget to place the stop loss according to your money management system. Make further analysis of market quotes in a separate trading system. For example, I use thinkorswim together with mt4. " v:shapes="Рисунок_x0020_23">

After you have a new entry setup, open your trading platform and open new order. In case the first order is still on the market and is opened in the opposite direction, first correct the levels of stop loss & take profit, according to the new forecast.  

 

Even trading one account, don’t use several trading systems. Sooner or later one trading system will show the buy signal, while the second one will indicate the sell signal. Or even worse: several trading systems will show a signal in one direction, you will open positions and the market will go against you. As a result, you will have a daily loss of over 10%. If you have large deposit, such one-time losses will unsettle even a psychologically resilient trader.  

 

Having analyzed returns’ charts of successful traders, I came to a conclusion that in order to have stable growth of returns, you should follow one simple formula:

One account = one trading system + one timeframe + money management

Of course, your trading system must have positive math expectation and clearly defined rules of market entry and exit as well as the stop loss.    

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