The first step to become a successful Forex trader is to find a good system. You need to look for a strategy that fits your trader personality. Although different trader types means different trading approaches there are some basics that apply for everyone, and you should take into consideration when selecting your Forex system.
1.- Money management.
It doesn’t matter if you are an aggressive or a conservative trader. You need to know how much you are going to risk on each trade. How much are you willing to lose if things go wrong? Money management is, no doubt, an essential par of any system of value. Before you consider to purchase any type of system confirm money management is an integral part of its design.
2.- How much can you realistically expect to make.
Although past performance is not guarantee of future profits it is a good start. If a system have performed well in the past it is reasonable to expect it will perform the same way in the future. There is no system that can win 100% of the time but if it has a high win-to-lose ratio; and you apply good money management rules you can expect to profit from it.
When you buy a system look for one that has a money back guarantee and use your trial period to test it. Although 30 to 60 days won’t be enough to know much about a system’s performance you can use this time to back-test it an get a general feeling of its effectiveness.
3.- Always trade demo first.
You should always try your system on a demo account. One of the beauties of the Forex market is that you can trade live with virtual money. If your system performs well on a demo account you can expect it will work when you trade for real.
4.- How often will you take positions.
Before you buy any system try to find out how often does the system trade. Does it enter positions once a day? Once a week? Several times during the day? Personally I only trade high time frames (In my experience this is a more profitable approach) but you may not be comfortable with this. Finding a system that fits your personality is very important.
1.- Look at least for 5 different Forex systems that consider money management as an integral
part of its design.
2.- Look for reviews of as many Forex systems as you can.
3.- Try to find out if the seller trades his system.