Simple Techniques for Mastering The Best Trading Systems That Turns Big Profits
Once you`ve developed the best trading systems that
accurately reflects your goals, and can respond to any
market situation with clear actions, you are ready to take
the next step in your trading. These are some principals
and techniques that I have found to be indispensable in
my trading career. Once you`ve begun using them, I`m
sure you`ll feel the same.
First, the best trading systems have only one market to
trade in. Real money is made by mastering your chosen
market. Many traders fall into the trap of thinking the
more they trade, the more money they will make.
Unfortunately, this does not hold true.
In a similar vein to this, keep the best trading systems¨C
really super simple. Those same traders often
complicate the best trading systems so much that they
become nearly impossible to trade. This is usually
accomplished through over optimization, adding far too
many indicators. Instead, keep your plan your best
trading systems as streamlined as possible. That way, it
will be robust enough to trade across many market
conditions. Through testing, I have found that over
optimizing a plan will make it perform better on
historical data. However, these plans usually trade
worse in real time, thus taking away the goal to having
the best trading systems.
Once your best trading systems are up and running,
document it. All successful traders that I come in contact
with document their plan ¨C are my plans really the best
trading systems or do I need to take some complicated
bugs out of it? They have their exact trading
methodology written down. The traders who lose money
don`t have their trading methodology written down. You
should clearly write out your methodology. Why is it so
important? When you sit down and spell out how you
perceive the market, you are accepting the fact that you
might be wrong. You are beginning to accept
responsibility. With this acceptance comes a renewed
commitment and dedication to your system that will
allow you out last the markets fluctuations. This is a key
element to keeping your plan the best trading systems.
This next strategy is over-looked by almost every trader.
However, it is one of the most critical points to your
success. You should back test your system. Back testing
a system involves applying the rules and conditions of
the best trading systems to historical data. With back
testing you can determine how profitable your system
can be, and predict its win/loss ratio. These numbers
will not be 100% accurate, as price movements in the
past are never repeated perfectly. However, you can
assume that similar patterns and trends will occur over
time, giving you invaluable insight into how the best
trading systems will perform.
Back testing will also give you the confidence you need
to trade the best trading systems . Confidence is often
the hardest hurdle to overcome in any of the best
trading systems. So, whatever technical analysis
criterion you use to trade with, be it moving averages,
candle sticks, volatility breakouts, fibonacci
retracements or any other of the best trading systems
you have devised you are going to need to back test it
Of course, you should also employ excellent money
management rules. Despite it`s importance, money
management still remains relatively unknown by many
traders and investors around the world. In fact, Dr. Van
K. Tharp, a world-renowned leader in professional
trading coaches and consultants says: ¡°Perhaps the
greatest secret to top trading and investing success is
appropriate money management.¡±
I call it a ¡°secret¡± because few people seem to
understand it, including many people who have written
books on the topic. Some people call it risk control,
diversification, or how to ¡°wisely¡± invest your money.
However, the money management formula that is the
key to top trading and investing is simply referred to as
It has taken me years to simplify these rules. Sure, it
was a tough row to hoe, but the rewards have been
worth it. The good news is you don`t have to go down
the same road I did. After countless clients asking for
coaching on this topic I decided to create a system that
takes you through the process of designing excellent
money management rules step-by-step. I named it
¡°Trading Secrets Revealed¡±. You can learn more about
these secrets, by visiting:
For my last point, let me draw some parallels between
running a business and trading. Most successful
businesses keep statistics on everything from their
conversion rate to their average dollar sale. The reason
a successful business does this is to create a scorecard
of where they are right now. They understand you first
must keep score before you can begin to improve that
score. Trading is exactly the same.
You should look at trading as a business. To do this you
need to learn some valuable statistics about your
system. It`s the only way you can improve performance.
How can you expect to improve something unless you
know what it is you are looking to improve? You need to
know your R multiples, win to loss ratios, expectancy,
and other similar statistics. You can learn more about
these and other vital statistics by reading Trade Your
Way to Financial Freedom by Dr. Van Tharp.
With a back tested, robust and the best trading systems
you can possibly in your hands, and a good
understanding of money management and the market,
you will maximize your trading potential. Once you`ve
applied these techniques, you will be surprised at how
profitable the best trading systems you designed will
become. Enjoy your success.
David Jenyns is recognized as the leading expert when it
comes to designing profitable trading systems.
His most recent course Trading Secrets Revealed is a step-
by-step trading roadmap to having excellent money management.
Learn how *you* can become one of his students.
Click Here ==> www.trading-secrets-revealed.com
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