How to find a good forex system? In this post, we will discuss how you can find a good forex system. Without a good forex system, your quest for making money in the forex market is doomed from the very start. A good forex system is like a good friend that comes handy in hard times as well as good times. Just like choosing a friend, you should choose your forex system carefully after a lot of testing. A good forex system is the foundation on which you should build your trading career.
Many new traders hop from one system to another never giving enough time to anyone system. After trying a system for a few days, they abandon it and go for another system. What you need to understand is that finding a good system takes time and a lot of testing. Only by thoroughly testing a system on the demo account, you can understand it and figure out whether it is a good system worth trading live with or not.
So, this is how you can find a good forex system. Make a list of 3 forex systems that you think are good and have at least 60 days of no questions asked money back guarantee. This way you can try these systems one by one and if a system doesn’t work go for a refund and try the next one in your list. So, download the first system in your list. Go through the system and once you have understood it, trade with it on the demo account for a period of one month.
At the end of the month, do a through analysis of the performance of the system during the one month of demo trading. Calculate the win ratio of the system, the number of trading signals that it gives daily, the average size of the wins and the average size of the losing trades. You must also calculate the max drawdown of the system during the month. This is something very important. Max drawdown will give you an idea of how much you can lose on average during the month.
For a thorough testing of a forex system, you need to make at least 50-100 trades. The ideal is more than 100 trades. You see performance of a system is a statistical figure that becomes more and more accurate as the number of trades that you make increases. It is just like flipping of the coin or doing any other random testing in which the law of large numbers apply. So making 100 trades with a forex system should be your ultimate goal before you decide whether this is a good system or not. If the statistics that you calculate after making at least 100 trades are not encouraging, get a refund and go for the second system in your list. After testing two to three systems, you will be able to find a good forex system that you can seriously master and trade live with to make a successfully living as a forex trader!