Stick To Your Strategy
So you may have been endlessly searching for the perfect forex trading strategy that would fit your trading personality. You want a trading strategy that carries a certain amount of risk, but not too much for your own comfort. You prefer strategies that open and close trades within the same trading day because you cannot sleep well knowing that you still have some money on the line that you might actually lose should the market go against your position. And you also have certain technical indicators that have become your favorite that you trust them to give you the signals when the market starts to move. You found the strategy that fits all these characteristics. And you have already tried it for quite sometime not in a demo account. It proves to give you an acceptable level of profitability. Now, what?
Going Live With You Trading Strategy
You try the forex trading strategy now on a real, live account.
But after a few trades in a two-week span, you feel uncomfortable. The trading system that you chose, which was supposed to give you around 70% winning trades suddenly lost 3 trades in a row, bringing down its winning percentage to around 60%.
Tweaking The System
You tweak the trading strategy. You add another indicator, hoping that it would screen out all the false breakouts being given during the past losing trades. And you start cutting profits even if your original system dictated that you let it run some more, fearing that the market would reverse itself and hand you another loss in your trading once again.
Then, it becomes worse. With the tweaking that you made within the trading strategy, you continued incurring losses. And this time, the losses became bigger because you started ignoring your original rules on cutlosses. You let losses run and cut profits short. The winning percentage of your trading system goes further south, crossing the 50% level. You now have a losing forex trading strategy.
Then you start looking at the various forex forums once again for a new trading strategy. You found one that seems promising. You try it out on a demo system. It makes profitable results. You apply it to your love account, totally replacing the old system that you chose just barely a month ago.
The new trading strategy seems okay. It gives you 3 consecutive winning trades. You feel happy. You feel glad that you changed your trading system.
But things started going wrong once again. You start losing trades. One, two, three. You started feeling that uncomfortable emotions once again. You take another look at your trading strategy. You again feel the itch to tweak a few things within your forex trading strategy. Add a few technical indicators to make it better. You, again, change it to the point that the trading system becomes unrecognizable from its original form anymore.
And so the cycle just keeps on going.
System Jumpers
You may belong to a group of traders which are called System Jumpers. These traders, as the name suggests, are people who jump from one system to the next in search for the perfect system that would satisfy them.
Unfortunately, there is no such perfect system. And the problem lies not within the systems that they have tried, but the problem lies within their psychology of trading. If your have chosen a forex trading strategy based on a number of factors that fit your trading personality and trading goals, just verify if the system is indeed profitable by trying it out in a demo account. If it proves profitable, then use it. And use it consistently.
Losses are part of any trading system, even the best ones. But if you trust your system, it will give you your expected winning percentage in the long-run. That is why it is called an average winning percentage. You cannot expect it to produce the same winning percentage for every 5 trades in a row.
Trust and Stick With Your Forex System
If you continue to be a system jumper, you may never find the trading system that would suit your trading personality and fit your investment goals. You would just continue to lose equity while changing from one system to the next.
Choose a trading strategy. Test it. Trust that it would be profitable. And stick to that trading strategy.