Places To Get a Great Forex Trading System

It’s very important that if you’re exploring forex trading or already trading that you have a trading system. One aspect of that trading system are the actual setup rules which usually contain entry and exit techniques. Traders put a lot of time and effort in developing these setup rules too often neglecting other aspects such as position sizing or relative size of your profits compared to losses. Therefore it’s important to find a comprehensive forex trading system.

Where can you find a comprehensive forex trading system? Throughout the last three years, I’ve been through many trading systems obtained mostly from books, forums, or other websites. I’ve found that almost every time, I’ll mold that system into something totally different than the original incarnation, something that fits my personality and style of trading. Many times, the original system will also need to be expanded to include things that were neglected or forgotten. Those of you searching for the perfect system may find this method of modifying existing forex trading systems desirable. There are places where you can find the whole package without any need for modification.

This brings me to the question, "where did you get your forex trading system?" I think there are four main ways of getting a trading system.

  1. Buy it. There are tons for sale out there on the net but heed caution. Many were just copied from forums, books, or other websites. Sometimes when you buy forex education, part of the package will include a trading system. For instance, Rob Booker provides his Arizona rules as part of his mentoring program.
  2. Get a free one. There are many free systems that can be found in books, forums, or other websites. I guess one can question whether a system found is a book is free since you paid for the book.
  3. Create an original system yourself. My main trading system is an original creation. There may be other systems out there that are similar to it since it’s a culmination of years of exposure to other systems and experiences.
  4. Modify someone else’s system and make it your own. As I stated above, I have done this many times.

I’ve created a poll that asks you this question here. http://www.forexproject.com/forex-polls/

 

Want To Buy a Forex Trading System?

Why would you want to do something like that!  I’ve been sent many forex trading systems for free in exchange for the possibility that I’ll review it favorable.  I have yet to receive one that resembles a trading system.  Having rules for entry, exit, stop-loss and targets do not make it a trading system.  

I’m warning beginners and others after the latest trading system was sent to me.  I opened the attachment and it contained the same filler that all the others had, a brief overview of the currency market, simple rules that comprise the trading system, an attached Metatrader expert advisor and bad advice.  This particular system I had seen before though; on the Forex Factory trading system forum. The system being sold for over $80 USD was a split image of the Sidus Method that you can get for free at the forum.   The website that promotes the system is also a split image of many other forex scam websites complete with fancy cars, boats,  a friendly picture of the person selling the trading system (this isn’t really him/her) and promises of wealth.  DO NOT BUY TRADING SYSTEMS! You will get burned everytime.  Most are stolen off websites and forums.  They’re also packaged with a lot of extras (indicators, expert advisors, e-books, etc) and marketed as the next greatest thing.  You can find thousands of free forex trading systems, indicators, expert advisors, and e-books anywhere on the internet for free.

I have zero tolerance for scammers so I caution you because they’re everywhere and forex is a breeding ground for them.  Do you want to learn how to trade? Then be prepared to dedicate yourself to doing so without the thoughts of instant wealth being sold everywhere on the internet.  It’s not going to happen.  If it were happening, "traders" wouldn’t be selling you an $80 trading system. 

Buy the ASK Sell the BID

Here are some helpful visitor comments received in the last 24 hours.

The first relates to the confusion regarding bid and ask prices experienced by beginner traders.

Posted by Nik 

"This is the line I used to use when I first started."

"Buy the ASK , Sell the BID"

The second is an observation regarding trading systems offered by others and backtesting.

Posted by Dropout

Anyone offering a new system should be able–at minimum–to say that
they've manually backtested it for at least a year's worth of data,
resulting in "x" number of winning trades and "y" losing trades, for a
profit of "z."

However,
99.9% of the time, experts selling systems, and those posting their
systems on message boards, say, basically, "Here's a system I've been
fooling around with. I looked back at a few trades I could have made
with it, and it looks really good." Then, they and others who follow
their advice start trading the system with live accounts.

As you can probably tell from my tone, I think this is a bad idea.

Forex Trading System

Posted Forex Trading Systems

Bollinger Bands of Ultimate Oscillator System

Channel Strategy

Commodity Channel Index Trading System

Complex Trading System

False Breakout Filtering

Perfect Order

Simple MACD Trading System

False Breakout Filtering

Environment: Strong trending markets that make new highs that then proceed to fail by taking out a recent low and then reverse again to make new highs

Strategy Rules:

Long Trade

1.    Look for a currency pair that is making a 20-day high
2.    Look for a pair to reverse over the next 3 days to make a 2-day low
3.    Buy the pair if it takes out the 20-day high within 3 days of making the 2-day low
4.    Place the initial stop a few pips below the original 2-day low that was identified in step 2
5.    Protect any profits with a trailing stop or take profit by double the amount risked

 Short Trade

1.    Look for a currency pair that is making a 20-day low
2.    Look for a pair to reverse over the next 3 days to make a 2-day high
3.    Buy the pair if it takes out the 20-day low within 3 days of making the 2-day high
4.    Place the initial stop a few pips above the original 2-day high that was identified in step 2
5.    Protect any profits with a trailing stop or take profit by double the amount risked

Commodity Channel Index Trading System

Required Indicators:

CCI indicator
CCI Control Level (user-defined); default value is +40, -40
CCI Extreme Level (user-defined); default value is +100, -100

Entry-Exit Conditions

Long Entry:  CCI crossing above CCI control level (+40)

Long Exit:    CCI crosses above CCI extreme level (+100), then exit when CCI crosses below CCI control level (+40)
or
CCI never crosses above CCI extreme level (+100), then exit when CCI crosses below 0

Short Entry:    CCI crosses below negative CCI control level (-40)

Short Exit:    CCI crosses below negative CCI extreme level (-100), then exit when CCI crosses above negative CCI control level (-40)
or
CCI never crosses below negative CCI extreme level (-100), then exit when CCI crosses above 0 

Complex Trading System

Type:     Always in the market trading system

Required Indicators:

Short Moving Average
Long Moving Average
Relative Strength Indicator
MACD 

Entry

Long Entry Conditions:

1.    short moving average > long moving average
2.    rsi > 50
3.    MACD fast line > MACD signal line 

Long Exit Conditions:

1.    short moving average < long moving average
2.    rsi < 50
3.    MACD fast line < MACD signal line 

Short Entry Conditions:

1.    short moving average < long moving average
2.    rsi < 50
3.    MACD fast line < MACD signal line

Short Exit Conditions:

1.    short moving average > long moving average
2.    rsi > 50
3.    MACD fast line > MACD signal line

Channel Strategy

Required Indicators:    Trend Lines

Recommended Trading Environment:    Prior to fundamental market event or when used prior to open of major financial market

Rules for a long trade (rules for short trade are opposite):

1.    Identify a channel on intraday or daily chart; the price should be contained within a narrow range
2.    Enter long as the price breaks above the upper channel line
3.    Place a stop just under the upper channel line
4.    Trail your stop higher as the price moves in your favor 

Perfect Order

Required Indicators:    Moving Averages (minimum of 5; ie: 10-day SMA, 20-day SMA, 50-day SMA, 100-day SMA, 200-day SMA)

Trading Environment:  Trending environment near the beginning of the trend

Condition Required:    Moving Averages need to be in perfect order or in sequential order.  For example, in an uptrend, a perfect order would be when 10-day SMA > 20-day SMA > 50-day SMA > 100-day SMA > 200-day SMA

Rules:   

1.    Find currency pair with MA’s in perfect order
2.    Look for ADX pointing upwards, ideally greater than 20
3.    Buy 5 candles after the initial formation of the perfect order
4.    The initial stop is the low on the day of the initial crossover for longs and the high for shorts
5.    Exit the position when the perfect order no longer holds

Bollinger Bands of Ultimate Oscillator System

Type:   Always in the market trading system

Required Indicators:    

Ultimate Oscillator
Bollinger Bands based on the Ultimate Oscillator
Moving Average of the Ultimate Oscillator 

Entries 

Long Entry:    Moving Average of Ultimate Oscillator crosses above the middle bollinger band
Long Exit:       Moving Average of Ultimate Oscillator crosses below the Middle bollinger band

Short Entry:    Moving Average of Ultimate Oscillator crosses below the middle bollinger band
Short Exit:       Moving Average of Ultimate Oscillator crosses above the middle bollinger band 

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