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/

 

Popularity: 76%

Is Rob Booker Forex Training Any Good?

This is a question I receive often and unfortunately I can no longer give an honest answer which is the only answer that I ever want to give. This is due to the fact that I haven’t dedicated myself to Rob Booker’s training since 2006 making my experiences outdated. The good news is that over the coming months, I will be able to give you an honest opinion because I am in the initial phases of giving his tutelage another go. This is possible because he has no expiration date on his training. According to his training contract, "You have as long as you need. You never have to pay me anything again…."

At first glance, there have been many changes to his training. His chart school, which are Rob’s trade ideas for students in video format appear to be more interactive. He provides a web conferencing platform where any of his students can attend and ask questions via messenging or voice. Other basic course materials seem unchanged such as the course introduction, FX basics, backtesting, support and resistance, moving averages, and similar topics. These are really basic though and I don’t see any reason why these would ever change. The course materials are also for the totally inexperienced forex trader, someone who has really never explored Forex outside of this course.

His primary trading system which has many components to it is called the Arizona Rules. He was just developing this system back when I lost interest in his training so I haven’t really explored it. If anything, it seems like Rob’s attempt is to provide his students with a well tested and possibly profitable trading system while also providing a comprehensive trading plan and system that one can take knowledge from to develop their own forex trading system.

I’m just getting involved again so I cannot comment further at this time but keep checking back here in the upcoming days and weeks for more details on Rob Booker Training. You can also read my previous and new experiences at http://www.forexproject.com/category/rob-booker-training/.

Popularity: 100%

Does Your Forex Trading Plan Encourage You To Overtrade?

Welcome Ryan, the author of this Forex Project guest post. Ryan trades from a quiet country lake house and helps traders through his blog at http://www.ryanokeefe.com.

Does your trading plan encourage you to over trade?

Recently I started a survey on my website asking traders to answer this question:

“What is holding you back from trading successfully?”

Currently the number one answer is “I make some money, and then I give it all back.”

Multiple factors contribute to this result however over trading is the most frequent concern struggling traders email me with. I have some thoughts to avoid over trading I hope you’ll find useful.

Consider Your Trading Plan

Over trading may be baked into your trading plan without you realizing it. I received an email from a concerned trader who struggled with taking too many trades although they were following their trading plan. I asked to look at their trading plan and found it was built around the 60 minute chart, the opening of each trading session, support and resistance levels plus the MACD indicator. How many opportunities do you think their trading plan generated on a daily or weekly basis?

I’m a big fan of slowing things down with longer time frames. Using a longer time frame automatically reduces the number of trades you will consider which reduces your trading plan’s built in propensity for over trading. You won’t be tempted to take a “valid signal” 10 times a day trading a daily chart. The vast majority of my trades are planned on the daily chart with the entry taken on a four hour chart.

Consider a Weekly Goal

In my trading plan I have a weekly goal of 50 to 100 points. This is a realistic goal for me to achieve and having the number written down reminds me that once I’ve made my weekly goal there is no reason to place it at risk. When the goal is achieved it is time to do anything other than trade. If you’re trading a lower time frame I think setting a weekly goal is even more critical because as we have discussed, shorter time frames offer more “trading opportunities” which place your profit at risk. I’ve had this weekly goal established for years and it works well against over trading.

Some traders may think a goal of 50 to 100 points a week is too low but keep in mind there are as many ways to configure a trading account as there are ways to trade it. With the right mix of leverage, lot size and risk capital you can do a lot with a goal of 400 points a month. Most important is to set your goal according to your personality; whatever you believe you can achieve and doesn’t stress you out in the process is best.

Do you really need to take that trade?

Before I open a trade I ask myself this question every time without fail. It seems obvious but so is lowering the landing gear before landing yet some pilots still manage to land with the gear up. Consider your emotions before you take a trade. Are you tired? Are you angry? Did you miss a good trade and now desperate to make some pips? Have you made your weekly or monthly goals? If you have met your goals you don’t need to trade, period. If you can honestly answer this question with a “yes” then pull the trigger but if not, don’t put your capital at risk.

Be accountable to somebody other than yourself.

Rob Booker pitched this idea in a presentation I watched online and I believe it is the strongest action you can take to eliminate any propensity you have to over trade. Whoever you report to should have a basic understanding of your trading plan and be able to question you on each trade in a constructive setting. This is a full disclosure exercise so find somebody you can trust.

I report to my Wife every Friday morning with a print out of our account statement. We go through every trade while I explain what system I used, why I took the trade, what mistakes I made and what I could do better next time. We also discuss what I should be doing during the upcoming week if goals are already exceeded.

If knowing you need to explain why you put hard earned profit at risk for an unnecessary trade at the end of the week can’t keep you from pulling the trigger, nothing will.

Popularity: 71%

Rob Booker Book Review

I had jury duty on Monday so I decided to bring lots of reading
material including a Kiplinger's magazine, the Economist, Men's Health,
and Rob Booker's book, Adventures of a Currency Trader.  I was
already halfway through Rob's book and just had not had the time to
complete it so I thought this would be a better time than any for doing
so.   

First, I appreciate the free book that Rob sent to me via
his publisher.  Even though it was free though doesn't mean that I'm
going to hold back on my opinion of it.  Saying that, I'm not much of a
book reviewer but I'll do my best.

This book is about a
fictional character named Harry Banes who works at a law firm in New
York City as a filing manager.  Harry wants to be a forex trader but
manages to blow up his account on his first few trades.   From there he
embarks on a journey to find the answers to being a successful trader
with the help of others.  

What were my positive opinions of the book? 

• The book was well written. 
• The book came across as a novel, unlike the countless forex books out there on the book shelf.  So I appreciate it's uniqueness.
• The book could be good reading material for a total beginner forex trader.   

What were my negative opinions of the book?

Popularity: 3%

Do One Thing Right

Piptopia, Rob Booker's site has a short post that says to do one thing right instead of getting tangled up with multiple financial instruments, indicators, time frames, and trading systems.  I've said this in the past and that's why I was concentrating on 1 currency pair and 1-2 trading systems associated with this currency pair.  But what happens when this system doesn't work anymore in the current market conditions? This is probably where patience comes into play.

I'm in the situation right now where my trading system isn't working out like it once was but I am sticking with it and trying to remain patient.  At the same time, I'm trying to explore other ways of trading and to be absolutely honest, don't know where to begin.  This has happened in the past to me, a period of confusion that sets in and takes me over.  I'm not trading recklessly but I feel frozen, unsure of anything.  My patience is being tested as I start to move away from my primary currency pairs to other currency pairs and multiple time frames.  I'm searching for something, anything but maybe I just need some time away to regroup.  Should I trade short-term or long-term, should I trade just the GBP/USD or start incorporating new currency pairs, should I try discretionary trading again or stick with system trading, should I….  What to do.  I wish I knew at this point what to do but one thing I do know is that I shouldn't jump in and start trading with this uncertainty hanging over me.  I'll continue to put trades in based on my systems but I'm not about to do something rash that would threaten my account balance.

When this confusion has happened in the past, some people have recommended that I just start trading in my demo account but I always felt that I couldn't take my demo account serious enough for it to be much help.  If I start using my demo account this time around, I'm not sure if anything will be any different.  Maybe I should consider trading smaller lots but this is just throwing away money at the expense of trying new things.  Therefore I'm going to try something new to see what type of involvement I can get from others to make trading more competitive and perhaps, more meaningful.  I've set up a FXContest on Oanda in which anyone can be a part of.  Quite simply, as long as you have a demo (FXGame) account with Oanda, you can join the contest.  FAQ's regarding the contest can be found at https://fx2.oanda.com/mod_perl/fxcontest/fxcontest.pl?rm=help#q6.  If you already have an FXGame account, it's as easy as going to the "Forex Project Contest 1" and joining.  You can do this at https://fx2.oanda.com/mod_perl/fxcontest/fxcontest.pl?rm=contestDetails&contestId=130.   If you currently don't have an FXGame account, they will instruct you on creating one and then you can join the contest.  The contest is slated to begin next Sunday, March 25th and will end 2 weeks later.  Performance is based on portfolio return.  They talk about this more in the FAQ's link above.  

I don't know if this is of interest to anyone but if it is, feel free to join.  I thought about offering some sort of prize that goes to the winner but I'd rather wait to see what type of involvement the contest gets first.  

Lastly, I just want to give credit to Booker's post that's mentioned in the first paragraph; you can find it here:  http://www.robbooker.com/blog/2007/03/20/do_one_thing_right.php

Popularity: 3%

A Fable About Trading

I received an email from Rob Booker today and he is having his publishers send me a free copy of his book, Adventures of a Currency Trader: A Fable about Trading, Courage, and Doing the Right Thing.  As always, I'll give immediate feedback once I've started reading it.  Here's a quick summary of his book:

This book explains in a simple, down-to-earth
manner how any individual can implement a conservative, consistent
trading system in the foreign currency market and, in so doing, become
a financially independent currency trader.  Written in an informal,
engaging style, the author Robert Booker traces his own path from job
frustration to profitable currency trader.  He provides readers with
simple strategies for making money every day in the currency market
without risking a large amount of capital.  He emphasizes the
importance of implementing the trading system in a methodical and
disciplined fashion and of avoiding emotional responses to the
market.  Throughout the book are profiles of traders trained by the
author and who exemplify key aspects of trading success.  The book is
both technical and motivational.  It provides techniques for
consistently making money in the currency market and it provides
stories of ordinary people who are using those very same techniques to
trade successfully.

Popularity: 2%

Trading Performance Update and Ramblings

The H-system has performed well since I started trading it again; it looks like October may be one of my most profitable months trading.  On Friday, I was up 287 pips.  Yesterday, I captured 90 pips and today I'm up 40 pips on my closed lots with a guaranteed profit of 30 pips on my only open lot.  That brings the total to 447 pips for October.  

I've been working on a couple more systems to add into the mix.  The goal for me right now is to trade multiple systems and to incorporate additional currency pairs instead of just the GBP/USD.  One system that I just finished backtesting on 5 years of data uses the USD/JPY only and trades during the Asian and European sessions.  It certainly loses more than it wins but the average reward/risk on each trade is 2:1. 

As this journey continues going forward, certain things that I was told when I first started trading become realized more and more each day.   All of these things are based on what I personally have noticed over the past year and don't necessarily mean they are true to you.  Remember that I've only been trading currencies for a year.  I may look back at this post a year from now and roll my eyes wondering how I could have ever thought this.  

1. I have to keep discretionary trading to a minimum.  This doesn't mean that I won't use any bit of discretion when trading but my personality is more suited to trading systematically with a touch of discretion.  The systematic part is present in each and every trade but the discretion may or may not be needed in a particular trade.  
2. You don't have to win more than you lose.  This means making money management the most important part of your system.  In fact, I shouldn't make winning or losing my #1 goal.  The #1 goal should be to preserve my capital. 
3. Searching for the holy grail is not fruitless.   This may sound contradictory but there is nothing wrong with trying to find the holy grail as long as you remain realistic.  Trying to find that perfect system helps one come to that realization that there may not be one.  Searching also provides one with experience and motivation to find the best of the best.   The holy grail to me doesn't have to be a system that wins 100% of the time.  It can be a system that suits me best and produces an outcome that is favorable to my trading experience. 
4. I don't need a mentor because I have you and you have me.  I'm not saying that I can provide you with advice on how to do this for a living nor am I saying that a mentor won't help you.  I'm saying that you have every other trader at your disposal either through forums or emails that you can tap to get you back on track.  Everyone that has every sent me an email or comment has helped immensely no matter what the question was.  It's actually unbelievable how helpful and honest most people can be.  It helps restore my faith in humanity.  I've also tried to answer every question that was ever posed of me because it's just another nugget that you or I can use to come to our own conclusions.  Rob Booker or any other mentor won't tell you how to be profitable.  Booker will give you advice based on his understanding but it won't work for you until you can put it all together on your own.  For instance, he tries to get his students to trade breakouts of the European session high or low during the US session.  I don't think he expects you to continue trading this forever or continue to follow everything he has to say for the rest of your life.  All he is doing is giving you the discipline to follow a system, tweak a system, and make decisions on your own. 

I have a lot more realizations but I think this is enough for one day.

Popularity: 4%

Trend Trading Tricks

Rob Booker is having a live question and answer session tomorrow at 15:00 GMT titled, "Top Five Tricks of Trend Trading" on FXStreet.  You can sign up at the following link:

http://www.fxstreet.com/live/showroom/session.aspx?id=edba3d90-cafa-4dec-9d38-81c7a46d1a18  

Popularity: 5%

Forex Project Is Now In 10 Languages

The Forex Project can now be translated to the following languages:

French, German, Italian, Spanish, Portuguese, Japanese, Korean, Chinese and Arabic.

I cannot read any of these languages with the minor exception of Spanish where I know words like Hola and Como Esta so there really is no way for me to know how well this site is being translated.  In one of my posts, the spanish translation for Rob Booker is Robo Booker.   For any multilingual visitors, please let me know if the translation is readable.   

To translate, click one of the nine flags on the right menu above the big FXCM advertisement.

Popularity: 2%

More In Store From Rob Booker

It looks like there is more in store from Rob Booker in the coming weeks for me and his other students.  Here is a partial email that I received today:

For the last two days, I have been busy working on some great new
stuff.  We are working 10+ hours a day at the new office, and here is
what is coming next week:

1.  A filter for the Scholastic
Divergence system that makes it far more profitable, and so that it
takes far fewer trades.  You know that when the market trends, the
divergence trades get whacked.  No more.

2.  A filter for the New York session.

3.
 A brand new trend-following system.  I can't reveal anything about it
yet, but we have been testing hundreds of trades and we think we are
almost ready to write out the rules.

4.  Dave Murphy has been
working on new features for your student home page.  The changes will
make it easier to find the lessons and systems faster.

Popularity: 1%

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