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How to Find every Day Trading Program that Works
02-14-2018, 03:44 AM
Post: #1
Big Grin How to Find every Day Trading Program that Works
Trading with a system will dramatically improve your chances of earning profits in the markets.

The next challenge would be to locate a system that works. You've the opportunity to select from over 300 trading methods available to-day. Regrettably just 10% of them are trading profitably.

Within the next 3 minutes I will provide you the 10 Power Principles for Successful Day Trading Systems, which will assist and help you in your study.

Theory #1: Few principles - clear to see

It could surprise you the best daytrading programs have less-than 10 principles. The more rules you have, the more likely you 'curve-fitted' your trading system for the past, and this kind of over-optimized system is quite unlikely to create gains in real markets.

It is important that your rules are clear to see and implement. The areas may respond very wild and move fast, and you will not have the time to calculate complex formulas in order to create a trading decision. Take into consideration effective ground traders: The only instrument they use can be a calculator, and they make a large number of dollars every day.

Principle #2: Trade digital and liquid markets

We strongly recommend that you deal electronic areas as the profits are lower and you obtain instant fills. You have to know as quickly as possible if your order was filled and at what price, because based on these records you plan your exit.

Before you know that your access order is filled you should not place an exit order. When you trade open outcry markets (non-electronic) you might have to wait awhile before you receive your fill. By that point, the market may have already turned and your lucrative trade has turned in to a loss!

You get your fills in under one 2nd and can straight away place your leave orders when dealing electric markets. Dealing liquid areas you can avoid slippage, which will save your self you hundreds or even tens of thousands of dollars.

Principle #3: Make consistent profits

You must always look for a trading system that creates an easy and nice fairness curve, even though in the future the internet gain is somewhat smaller. Most professional merchants choose to consider little profits every day instead of big profits every now and then. If you trade for-a living, you must pay your expenses out of your trading profits, and therefore you should regularly deposit profits into your trading account.

Making constant profits is the secret of successful merchants!

Rule #4: Maintain a healthy balance between risk and reward

I would like to give you an example: If you go to a casino and bet everything you've on 'red', then you have a 49% chance of doubling your cash and a 51% chance of losing everything. The exact same applies to trading: if you're risking a lot You can make a lot of money, but risk of damage is very large. You have to look for a healthier balance between risk and reward.

Let's say you define 'destroy' as losing 20% of the account, and you define 'success' as making 20% profits. Having a trading system with past performance results let you estimate the 'risk of ruin' and 'potential for success.'

Your risk of damage should be always significantly less than 5%, and your potential for success should be 5-10 times higher, e.g. Your chance of success ought to be 40% or higher, if your danger of ruin is 4%.

Concept #5: Locate a system that provides at least five trades each week

The bigger the trading frequency small the likelihood of having a month. Then 1 loser is sufficient to have a month, should you have a trading system that has a winning percentage of 70%, but only produces 1 deal per month. In this example, you may have several losing weeks in a row before you finally start making profits. Meanwhile, how can you pay for your bills?

You then have on average 2-0 trades per month, if your trading system produces five trades per week. Having a winning percentage of 70% - your chances of a winning month are extremely high.

That is the aim of all traders: Having as many successful months as you are able to!

Rule #6: Start little - increase major

Your trading system should allow you to start small and grow large. A good trading system lets you begin with 1 or 2 agreements, and then improve your situation as your trading account increases. This is in contrast to several 'martingale' trading systems that want increasing place sizes when you're in-a losing streak.

You probably heard about this strategy: Double your contracts each time you lose, and one winner will win back all the money you previously lost. It's perhaps not unusual to have 4-5 losing investments in-a line, and this may already need to trade 16 deals after only 4 losses! Trading the e-mini S&P you'd then need a free account size of at least $63,200, simply to meet the margin requirement. That's why martingale systems don't work.

Principle #7: Automate your trading

Emotions and human problems are-the most frequent problems that traders make. By all means you've to prevent these errors. Particularly during fast markets, it is critical that you determine the entry and exit points fast and accurately; otherwise, you might miss a business or find yourself in a losing situation.

Thus you should automate your trading and locate a trading system that either already is or could be automated. Automating your trading helps it be without any human emotion. The buy and sell functions are all automated, hands-free, with no manual interventions and you could be sure that you make profits when you should according to your program.

Concept #8: Have a high-percentage of winning trades

Your trading strategy should produce more than 50% winners. There's no doubt that dealing systems with smaller winning percentages may be successful, too, but the psychological pressure is tremendous. Taking 7 losers from 10 trades and not doubting the device requires good discipline, and many investors can not stand the pressure. Following the sixth loss they begin 'strengthening' the system or stop trading it com-pletely.

Especially for beginners it is a large help when you have a high winning percentage in excess of 65% to gain confidence in your trading and the body.

Rule #9: Choose a program that's tried on at the least 200 trades

The more trades you use in your back-testing (without curve-fitting), the greater the odds your trading system can succeed in the future. Look at the following table:

Number of Trades 50 10-0 200 300 500 Margin of Error fortnight 10% 7% 65-42

The more trades you've in your back-testing, the smaller the margin of error, and the greater the possibility of making gains in the future.

Concept #10: Opt for good back-testing period

I recently found the following ad: 'Since 1994 I've taught thousands of traders worldwide a Simple and Reliable E-Mini trading method.'

Therefore, none of these agreements existed before 1997, that is very interesting, since the e-mini S&P was launched in September 1997, and the e-mini Nasdaq in June 1999. What type of e-mini trading did this supplier teach from 1994-1997???

The exact same applies to your back testing: If you developed an e-mini S&P trading method, then you must back test it just for yesteryear 2-4 years, because even though the contract has existed since 1997, there is almost nobody trading it (see chart below ):

Now you realize how-to separate the con from great working trading systems. Through the use of this list you will easily determine trading programs that work and those that will never allow it to be.

Writers name

Markus Heitkoetter

Author's Info:

Markus Heitkoetter is a 19-year veteran of the markets and the CEO of Rockwell Trading. For more free information and methods and strategy how to make consistent profits with online daytrading, visit his website If you think anything, you will perhaps want to study about small blue arrow.
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