Finding a trading system that actually works is like trying to find a needle in a hay stack. It can be time consuming, costly and difficult, so is it worth it to put in the time and money? Let's look under a microscope to help answer this question and offer some "how to" tips for investing in the right system which you will use for your trading.
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Of course the price tag is almost always the most important factor in making a purchase. It is not wise to pay too much, however it may be worse to pay too little. Prices range drastically in the trading industry for systems from $200 - $20,000; while $20k may be excessive you must weigh the outcome potential with a longer term perspective. Is there potential to make that amount back in a reasonable amount of time that will not hurt your well being? Does the amount you are spending leave enough capital to trade and actually make money? If the capital tradable doesn't line up with your time horizon it is best to look for a more suitable solution. Trading with a system is not a get rich quick scheme so paying $200 will likely lose that and much more in a short period of time. Choose a feasible amount that will allow you to not break the bank and sustain enough capital to trade. A realistic cost for most will fall into the $2,000 - $8,000 range.
Keep in mind you may not be looking for a complete "black box" solution, however you should be able to remove 100% subjectivity. You may always add discretion to your trades if you feel it necessary, but it should be an option and not required. It is highly encouraged to get the proper training on the financial markets before attempting to use a trading system of any kind. Once you have the training you will be able to further assess how the system will perform in a plethora of market conditions. Automation offers many benefits including push button testing, optimizing and reduced time in front of the computer screen. After deciding on the system you will trade, allocate your time previously used for research on the testing and optimizing. Since you're investing your money wisely, complete automation capabilities will help you invest your time wisely.
Each day the movement of price is ever changing. Volume will increase and decrease along with the volatility. A good trading system should work in multiple market conditions. If it is contingent on a trending market, you will lose out on many profitable opportunities and more importantly lose the profit you've already made.
Do not look for an “emini trading system”, look for the ability to trade multiple markets and time frames. The more limitations involved the less option you have for success. Create a portfolio across multiple asset classes such as stocks, futures and forex; test them and choose which are successful. This will give more opportunity to reap the rewards.
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Is there impressive risk management that will give you multiple ways to reach your financial goals? Managing your risk in each trade will help create longevity and consistent growth. Look for the option to reduce your risk and lock in profit as it is offered, otherwise known as a trailing stop. Without the ability to manage the risks involved in trading, a system could lose more than your initial investment.
Trading systems are a great way to supplement your income and even become a full time solution if the above criteria are included. Look for great risk management, complete automation capabilities and a plethora of features to help you get a complete understanding of the best trade times to help you reach your financial goals. Finally, never spend more than you have hoping for a quick return on your investment. Just like any other transaction, returns take time to accrue so have a realistic view on what to expect.
CFTC RULE 4.41 HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.
Trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing one's financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results. All Software provided or purchased is strictly for educational purposes only. Any presentation (live or recorded) is for educational purposes only and the opinions expressed are those of the presenter only. Testimonials may not be representative of the experience of other clients or customers and is not a guarantee of future performance or success.
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