Friday 20 March 2015

Why Your Trading System Fail, What To Do ..........?

Maybe one day you feel the gold trading system that you have started to often give wrong signals or frequent contact with a stop loss.


One thing that you must understand that a trading system can not survive for long periods of time, this is because the market conditions have changed. So we also have to modify the trading system that we use. If someone said that trading is an art where the one that lies the art of trading.
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When trading system we began showing symptoms of strangeness does not mean you are ugly or trading system it is time to be replaced. The point is not to replace your trading system because after all you are comfortable with trading systems that you wake up. It is like a vehicle that often we use every day when we're comfortable with the vehicles we drive, when the ride has started not feeling it might be time for servicing your vehicle or in-tune up.
Before you to judge that the trading system you are ugly and should be replaced, it would be wise if you re-do a backtest on your trading system and return to try to demo account first to see the new settings.
Here are the things you can do on your own trading system up and want to restore performance.
1. Perform the test with a larger time frame. If the time frame that you used previously did not fit, you can try it out for a higher time frame. The current volatile market conditions so you can try a higher time frame because it is usually more stable.
2. Replace your instruments traded. It is possible characters instruments / currency pair that you always traded has changed. You can do a test against another currency pair that may be the character does not really change.
3. Change the parameters of Stop Loss or Profit Target. If you previously quite successfully using the trading system with stop loss is short, but if a volatility become more "wild", then you can change the stop loss and profit target you. However, when changing the settings must consider the risk-to-reward ratio is.
4. Adjust the use of technical indicators. Too much use of indicators will be very confusing you, especially if the market moves pretty wild and more volatile. It would be wise if you limit the use of indicators.
5. Do backtest back. After you change the parameters of your trading system, then the next step is to do a back test back. If the results are good enough you can try to forward test with a demo account first facility. If you are sure it is back trading system gives good results only then can apply in the real account.
6. If a trading system that has been modified gives pretty good results as before the last step which share most of your profits for those who need or can not afford.

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