Forex Trading Systems That Maximize Profit

Forex trading systems that maximize profit are created from historical testing. Any manual or automated forex trading system should include a large amount of historical data to assist the trader to build a dependable system.

The majority of traders with a documented history of trading live using a particular system develop a risk pattern that consists of volatility, draw downs and position size among other factors. However, any trader experimenting with a new manual or automated forex trading system usually will not have the advantage of live trading know-how.

In the case of these traders, historical and replicated forex trading tests are the best substitute for actual trades. A reliable historical test will assist a trader in identifying patterns that can be used in further testing.

The most important results are net pips, maximum draw down, consecutive losses, and success rate. These are the results that provide the trader with enough information to rapidly assess the value of an automated or manual forex trading system.

Once your trading system fails to generate profitable results, you can rebuild or discard it entirely. If the forex trading system appears to have promise, you can refine it in order to squeeze the most profit out of the system.

While analyzing each trade you can identify problem areas and take corrective action with a minimum of information. Using the data and results from the live test, you can optimize your manual or automated forex trading system.

Only after confirming the results of the historical test, should any system be used for trading in a real account. Bear in mind, actual trades may differ from the historical trades in a number of ways.

Many times the process of fine tuning a system is obvious – adjust a stop, change an exit signal, change the entry schedule, etc. Other times the adjustment will not be as clear and this is when an automated forex trading system is extremely valuable.

A highly refined forex trading system that gives you a direction to trade in the market is only half the battle. You will also need to consider the size of the trade, precise setting of entry/exit points and other risk measures that must be applied to have any success in trading.

Make certain you have a forex trading platform that takes the complexity out of the many aspects of trading and delivers optimal buy/sell signals complete with entry, stop-loss and profit-taking points. In addition, you want detailed trade analytics, market commentary, technical indicators and charting.