Create and Use a Profit Making Forex Trading System

By Mark Solomon

Humans have little chance against a well programmed forex trading system. All the key decisions including currency pairs, entry points, exit intervals, loan to equity for each trade, and the limit orders can be instantly executed with a programmed forex trading system. Though currency or fx trading systems are complex beasts, even setting up the basics of currency pairs like CHF/GBP, how high to borrow from 1 to 75, etc., or when to enter and exit the trade can be enough to make the software pay for itself. By quickly producing orders that would require precious minutes if done manually, a forex trading system can lock in profits and prevent or cut loses in an instant. Only the programming of the forex trading system software must be tuned to assure it is a productive rather than a destructive tool

Forex trading software configuration and use depends on five (5) key steps.

1. Logically break down the forex trading strategy into the steps required for executing it.

2. Take each decision area of the forex trading system or method and outline it such as analysis, margin decisions, reversals and trend forecasting, whether major or exotic pairs, and selecting when to buy in and when to sell out a position.

3. Make a chart or graph with executions of each step in the forex trading system, or currency trading software. Do not be surprised with repeated executions or steps of analysis for each point of entry and exit or raising or lowering limits, along with shifting stops. Forex trading is an analytic endeavor. The analysis and execution of each trade must be instant but often requires a trial and error approach for achieving profitability in decision making within the software.

4. Having a list or table of steps that clearly state how the forex trading system will function is the easy part. Next, this information must be set up in the trading software. Often these trading software systems have drop down menus for setting currency pairs, margin amounts, etc. This can be manually triggered or automatically selected based on analysis within the system. That analysis function for triggering trades requires the most brain work and is where the profit or losses will come from. A very basic but still profitable method uses trend following strategies of setting a limit and hopping on the trade if a currency pair breaks the limit. For instance if the USD trades below a certain level against the YEN, then sell USD and buy YEN. While an old method, it is an effective way to jump on a trend in progress.

5. Testing the system is the most important step. Even after all the decision and analysis criteria are coded into the system, there are conditions the software does not decision criteria for perhaps, or possibly it is missing too many profit opportunities. In either case, untested currency trading systems can put a portfolio at risk. Test and test again. - 23223

About the Author:

Learn more about Forex Trading Systems. Stop by Mark Solomon's site where you can find out all about Forex Currency Trading and what it can do for you.