There are a literally thousands of different forex trading systems for sale today on the internet. Determining which of these is the best one to use can be a very time consuming and frustrating task for the beginning trader. The main reason why finding a truly effective forex trading system is so difficult is because they all claim to be the best and they all claim to meta trader 4 be “what you need”. So how does the aspiring professional forex trader determine which forex trading system is worth putting their time and money into? The first step is to differentiate between forex systems and forex strategies.
Forex trading systems typically are rigid trading rule sets that dictate to the trader exactly what to do and when to do it. Most forex systems are either based upon specific rules regarding lagging indicator implementation, or they take the form of a piece of computer software that tells you exactly what to do, these are programs that are sometimes called “forex robots”. The problem with these rigid rule based trading programs is that they attempt to eliminate the human factor from trading. While this might be a good thing because it can eliminate many emotional trading mistakes, it also eliminates “gut” trading feel and human discretion which is typically one of the factors that separates the amateurs from the professionals.
So what exactly is a forex trading strategy then? A forex strategy is not a strict rule-based trading method as many forex trading systems are, instead when you learn a trading strategy you are basically learning a new and insightful way of thinking about the forex market. Forex trading strategies allow you to utilize discretion and the skill that you may have developed from spending hours studying the charts. Essentially when you use a forex strategy you are operating on a solid foundation of technical and fundamental trading concepts which work to frame how you see and think about the forex market. When you get this foundation in the form of a time-tested and highly effective yet simple trading strategy, you give yourself the best chance at becoming a consistently profitable forex trader.
The main underlying issue that determines whether or not a trader can become profitable on a regular basis in the forex market is how well disciplined they are. You can be an average market technician but if you are extremely disciplined you will be a more profitable trader than the brilliant market technician with no self discipline. Many people like the idea of forex trading systems because they promise to fully or nearly fully automate the process of trading, which seems like it would help them remain disciplined. Unfortunately this eliminates the possibility of using your own brain to make trading decisions, and while this is good for helping to maintain discipline, it is bad for being able to take advantage of the power of human intellect. The best route to take is to train yourself to be disciplined while using a forex trading strategy that gives you the best chance at accurately reading price movement.