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How to locate every Day Trading System that Works
02-14-2018, 03:45 AM
Post: #1
Big Grin How to locate every Day Trading System that Works
Trading with something will dramatically improve your odds of making money in the areas.

The next problem is always to locate a daytrading program that works. You have the chance to pick from more than 300 trading systems available today. However only a huge number of them are trading profitably.

Within the next 3 minutes I will present you the 10 Power Maxims for Successful Daytrading Systems, which will assist and assist you in your research.

Concept #1: Few principles - straightforward

It might surprise you the best daytrading programs have less-than 10 rules. The more rules you have, the more likely you 'curve-fitted' your trading system to the past, and this over-optimized system is extremely unlikely to make gains in real markets. Identify new information on our related website - Click this webpage: small blue arrow.

It is important that your rules are easy to understand and perform. The markets may act very wild and go quickly, and you will not have time to be able to create a trading decision to assess complicated formulas. Think of effective ground traders: The only real tool they use can be a calculator, and they make a large number of dollars every single day.

Theory #2: Trade electronic and liquid markets

We strongly suggest that you deal electric markets because the commissions are lower and you obtain instant fills. You need to find out as fast as possible if your order was filled and at what price, because according to these details you plan your exit.

Before you realize that your entry order is filled you should not place a leave order. When you trade open outcry markets (non-electronic) you may need to wait awhile before you get your load. By that point, industry could have already turned and your lucrative industry has turned in to a loss!

When investing electric markets you get your fills in less than one second and could quickly place your leave instructions. Dealing liquid markets you can prevent slippage, that may save you hundreds if not tens of thousands of dollars.

Principle #3: Make constant profits

You need to always choose a trading system that creates an easy and nice value curve, even though in the long term the online pro-fit is somewhat smaller. Most professional investors choose to get little profits every day in the place of big profits every now and then. If you trade for-a living, you need to pay your bills out of your trading profits, and thus you should regularly deposit profits into your trading account.

Making constant gains may be the secret of successful traders!

Principle #4: Maintain a wholesome balance between risk and reward

I'd like to give you an example: If you visit a casino and bet everything you have on 'red', then you've a 49% chance of doubling your hard earned money and a 51% chance of losing everything. Exactly the same relates to trading: if you're risking a lot You can make a lot of money, but threat of ruin is very high. You must look for a healthy balance between risk and reward.

Let's say you define 'damage' as dropping 20% of one's account, and you define 'success' as making 20% gains. Having a trading program with past performance results allow you to assess the 'threat of ruin' and 'potential for success.'

Your risk of ruin should be always less than 5%, and your chance of success should be 5-10 times greater, e.g. if your threat of damage is 4%, then your potential for success must be 40% or more.

Concept #5: Look for a program that creates at least five trades per week

The higher the trading frequency the smaller the probability of having a losing month. Then 1 loser will do to have a losing month, If you have a trading system that's a winning percentage of 70-ss, but only produces 1 business per month. In this case, you could have several losing weeks in-a row before you finally start making money. Meanwhile, how will you pay for your charges?

Then you definitely have on average 20 trades per month, if your trading system creates five trades per week. Having a winning percentage of 70% - your odds of a month are really large.

That's the purpose of all traders: Having as many successful months as you are able to!

Concept #6: Start small - grow major

Your trading system must let you start small and grow large. A good trading system lets you focus on a couple of contracts, and then increase your place as your trading account grows. This really is contrary to several 'martingale' trading systems that require increasing position sizes if you are in-a losing streak.

You probably heard about this strategy: Double your contracts every time you lose, and one winner will win back all the money you previously lost. It is perhaps not unusual to have 4-5 losing investments in-a line, and this might already require to trade 16 agreements after just 4 deficits! Dealing the e-mini S&P you'd then need a free account size of at least $63,200, merely to meet with the margin requirement. That is why martingale programs don't work.

Principle #7: Automate your trading

Thoughts and human problems would be the most common problems that professionals make. By all means you have to avoid these mistakes. Especially all through fast areas, it is important that you determine the entry and exit points fast and accurately; otherwise, you might miss a trade or end up in a losing position.

Therefore you ought to automate your trading and locate a trading program that both already is or may be automated. Automating your trading causes it to be without any human feeling. The buy and sell functions are all automated, hands-free, with no manual interventions and you can be sure that you make profits when you should based on your plan.

Concept #8: Have a high-percentage of winning positions

Your trading strategy should produce over 506 winners. There is no doubt that trading systems with smaller winning proportions can be profitable, also, but the psychological force is great. Taking 7 losers out of 10 investments and not doubting the machine requires great discipline, and many merchants can not stand the pressure. Following the sixth loser they start 'strengthening' the machine or stop trading it entirely.

Especially for beginners it is a big help to gain confidence in your trading and the body in case you have a high winning percentage greater than 65%.

Rule #9: Choose a program that's examined on at the very least 200 trades

The more trades you use in your back-testing (without curve-fitting), the higher the possibilities your trading system will succeed in the near future. Look at the following table:

Number of Trades 5-0 10-0 200 300 500 Margin of Error 14% 10-7 64-42

The more positions you've in your back testing, the smaller the margin of error, and the greater the likelihood of producing gains in the future.

Principle #10: Chose a legitimate back testing time

I recently saw the next ad: 'Since 1994 I have taught a large number of professionals global a Straightforward and Reliable E-Mini trading strategy.'

Thus, none of these contracts existed before 1997, that's very interesting, because the e-mini S&P was introduced in September 1997, and the e-mini Nasdaq in June 1999. What type of e-mini trading did this dealer show from 1994-1997???

The exact same applies to your back testing: If you developed an e-mini S&P trading method, then you must back test it limited to the past 2-4 years, because even though the contract has existed since 1997, there is practically nobody trading it (see chart below ):

Now you realize how-to separate the con from great working trading systems. By applying this record you'll easily determine trading techniques that work and those that will never allow it to be.

Authors name

Markus Heitkoetter

Author's Info:

Markus Heitkoetter is a 19 year veteran of the areas and the CEO of Rockwell Trading. For more free information and methods and technique how to make consistent gains with online daytrading, visit his website http://www.rockwelltrading.com..
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