Making Your Own Mechanical Trading System (Summary)

Many strategies work, but many forex traders lack the discipline to follow the rules, and as a result, they continue to lose money.

Your mechanical trading system should try to achieve two objectives:

• To be able to spot a pattern as soon as feasible.

• To be able to avoid whipsaws, you must be able to think of solutions to prevent them (confirm your trend).

If your forex strategy is lucrative, you should trade it live for at least two months on a demo account.

This will give you a better understanding of how you'd trade your system if the market were to move. Trading live is not the same as manually backtesting.

You're ready to trade live with real money once you've demo traded your strategy for at least two months and are still profitable.

But, no matter what, you must always remember to follow your rules!

To create an automated forex trading system, follow these six steps:

• Determine your time limit.

• Find indications that aid in the early detection of trends.

• Find signs to help you stay on track and prevent whipsaws.

• Define your level of risk.

• Define where you'll enter and exit.

• WRITE DOWN THE RULES OF YOUR FOREX TRADING SYSTEM AND FOLLOW THEM AT ALL TIMES!

Your system will be tested in three stages:

The first phase consists of:

Return to the beginning of your chart and advance it one candle at a time.

Trade according to your system's principles and keep track of your deals to see if it's lucrative. This is referred to as backtesting.

Second Phase: If your system is lucrative, you trade it live for at least two months on a demo account.

This will give you a better understanding of how you'd trade your system if the market were to move. Trading live is not the same as manually backtesting.

Third Phase: After you've successfully demo traded your system for at least two months and are still profitable, you're ready to trade it live with real money.

But, no matter what, you must always remember to follow your rules!

Now for the legal items that our lawyers wanted us to do.

THERE ARE MANY LIMITATIONS INHERENT IN HYPOTHETICAL PERFORMANCE RESULTS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES LIKE THESE. IN FACT, THE DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS ACHIEVED BY ANY PARTICULAR TRADING PROGRAM ARE OFTEN SHARP. HYPOTHETICAL PERFORMANCE RESULTS ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT, WHICH IS ONE OF THEIR LIMITATIONS. HYPOTHETICAL TRADING ALSO DOESN'T INCLUDE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR FINANCIAL RISK IN ACTUAL TRADING.

FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR ADHERE TO A SPECIFIC FOREX TRADING PROGRAM IN THE FACE OF TRADING LOSSES ARE MATERIAL POINTS THAT CAN AFFECT ACTUAL TRADING RESULTS IN A NEGATIVE MANNER. MANY OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS, ALL OF WHICH CAN AFFECT ACTUAL TRADING RESULTS.