Before you switch to your own Forex trading system or the one that you have bought from someone else, I would suggest you organizing the process in such way that you will be able to keep up with your strategy and track your success honestly. Developing a trading system is a hard process, but keeping to it without falling to emotional trading is even harder. Here is a list of the steps I recommend doing when you find your system:
- If your strategy uses technical indicators directly or there are indicators that can help you spot entry/exit points exist, write them down and add them to the chart. Avoid adding indicators that are not used by your system.
- Write down and open in your trading platform the timeframes on which your system is tested. Do not try trading on the timeframes that do not work with it.
- Define your entry and exit conditions — whether they depend on indicators or something else, those should be definable conditions. Avoid using something else except your system's guidelines in your trading.
- Before each trade, calculate the position size depending on the risk that is tolerable with your strategy. This will help you with money management and will save you from overtrading or gambling.
- Follow your strategy, writing down all your profits and losses. Be honest with yourself. If you avert from your initial strategy, try to record that too.
- Keep to your system without changing it for a significant amount of time. Try to see its weak and strong sides when you have enough statistics on your hands.
Over the years that I have spent trading Forex, I have developed many trading strategies. The majority of them were bad, but many strategies were unjustly abandoned by me because I had failed to use them correctly. Continuous modification of the system, cheating myself, and forgetting to record statistics killed more than one successful strategy.
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