Maybe in the beginning when traders are just starting out in trading, they think that they just need to enter the market, press the ‘buy’ or ‘sell’ button, wait until the profit. It's as easy as that!
But after having faced the market for a longer period of time, they will realize that it is not easy to go to war without any preparation.
So this article will help traders prepare before entering the market. Here are 4 tips to design an effective and consistent trading system.
#1 Set parameters for entering and exiting the market
Before you want to open a trading position, you need to know the direction of market movements through a study of market sentiment, central bank policy for each currency you want to trade as well as economic data that affect price movements in the near term.
Not only that, you also need to know where and when to get out of the market. For example, when your profit target has been reached, you can exit the market earlier. Or when there is a change in sentiment in a market that is no longer in favor of your trading position, you may need to act to control losses.
#2 Set up the system for varying market conditions
The market is constantly changing and will certainly not always side with a trader's trading position. So, you need to be prepared with a more flexible trading system to help you stay calm and not panic when unexpected situations occur in the market.
#3 Observe the market reaction to your trading system
After you have set up a trading system framework, observe the market's reaction through price movements and decisions on your trades. Does it really help you get an appropriate profit target in addition to a reasonable loss to receive?
#4 Application of a trading system for an appropriate period of time
After you have obtained a complete trading system, the application in the real market for an appropriate period of time may be 6 months to 1 year, for you to evaluate the results of your trading results whether the trading system is able to consistently generate profit.
