Putting the theory into practice

In the first article of this series I started with the statement that online forex trading is simple and I hope that I have been able to convince you by means of the preceding articles that theoretically this really is the case. In this article all important aspects are once more addressed, so you can effectively going to work on these aspects and can learn to put them into real practice.

Without a profitable forex trading system you’ll never going to become a profitable forex trader. Although in terms of percentage this is just a small part of your success as a forex trader and aspects like psychology and risk management weigh much more heavily on this process, the basis simply has to be solid.

The other way around the same goes, you may own a profitable trading system, but when from a psychological point of view or with regard to the risk management things are not good enough, you’ll definitely not become profitable in the long term.

A profitable forex trading system

The good news is that obtaining a profitable forex trading system is in fact comparatively rather simple. In the first place you can take advantage of the offer provided by the free OFS Trading System on Online Forex Strategy. The only thing you still have to do is to master the rules of this forex trading system and consequently the foundation has been laid.

A big additional advantage is caused by the fact that the OFS Trading System has been designed in such a way that the odds are always in your favor and that there will be little space left for your own interpretation. Furthermore the rules are very simple and each time you’ll be trading the same patterns with a high probability of success. In other words the OFS Trading System is already laying the foundation for you to be able to create the right mind-set from a psychological point of view as well.

If you already own a profitable forex trading system, it’s essential that you test this system by means of a number of conditions. Doing this you should remember the story of the turtles. The most successful forex traders were employing a simple forex trading system with well-defined rules, which hardly allow any space for their own interpretation.

Probability behind a forex trading system

No matter what kind of forex trading system you’re employing; don’t ever neglect the probability behind the trading system. When is your forex trading system profitable, or in other words: which success rate do you expect to gain in the long term in combination related to what kinds of risk/reward ratio’s?

You ought to have a clear view of how you’re going to see to it that the odds will really be in your favor. For instance you can get the odds in your favor by trading into the direction of the trend, but of course there are also other possibilities. If for instance your standard success rate amounts to more than 50%, you know that you’ll already be profitable in the long term with a minimal 1:1- risk/reward ratio.

Be well aware of your purpose and how you’re planning to concretely reach this purpose based on the available figures. I will use the OFS Trading System as an example.

Step 1 is to get the odds in our favor by trading into the direction of the trend, by entering at a favorable moment and by continuously trading the same patterns, which will return time after time and which will offer a high success rate. As a result of this the success rate will consequently be exceeding 50%.

By only trading setups with a minimal 1:1-risk/reward ratio and preferably still even better, on the long run you’re going to be profitable applying the OFS Trading System.

This approach may sound quite simple, but so it is, provided that you have a long term vision, so that you will be able to employ this principle in actual practice.

Handling a long term vision

However the foundation for a long term vision is based on the fact that you have thoroughly elaborated the aspect of the probability of your forex trading system. You’ll have to understand what you’re doing in order to be able to approach forex trading in a more abstract way.

If you experience emotional feelings like gladness or disappointment during or after practicing a trade, this in fact is a very clear signal that you don’t dispose of a long term vision. Don’t get me wrong on this. Being a human being, it’s obvious that you are glad to have profitably concluded a trade, but on the other hand you’ll have to keep seeing things in a wider context!

You’re preoccupied with trading in the long term and along the way odd things can happen. It so happens that during a certain period things are going better as expected, but the other way around the same goes. If you start allowing these emotions to occur, you’re going to have some very hard times, for it is not only going to cost you a lot of unnecessary energy, but you’re also going to see things in the wrong context with all its consequences.

No sooner than after a great many trades you’ll get a comparatively clear view of your actual achievements and in the meantime you really should not yet be busy at all analyzing your results. It might be a good idea to analyze if your trade setups were satisfactory, but that depends on the result. As it happens you’re aware of the fact that, when your trade setups are appropriate, on the long run you’re going to make profit.

In the article “The importance of a long term vision” I provide a number of very useful tips about how you could approach your forex trading in a more abstract way and how you could apply the mantra “Everything passes”.

Handle a good risk management

Last but certainly not least: risk management. It’s very important that you handle a good risk management to see to it that you can’t go broke and that at the same time the credit balance on your forex account will surely get the opportunity to grow.

In case of forex trading almost everything is based on probability. This applies to a forex trading system as well as to the risk management that has to be handled. As you work in the long term and you are going to experience periods during which things may be going less good for a short while, you’ll still have to take care that you’ll be able to bridge these periods. Going broke is fatal, as you will not be able to trade without money. Of course the other side of the medal is also very important. The credit balance on your forex account must surely have the possibility to grow.

To handle good guidelines concerning a proper risk management, in which next to above mentioned matters also the comfort zone of a forex trader is taken into account, reading the article “Handle a good risk management” is highly recommended.

The ability to change behavioral patterns

I’m going to repeat it once more: Forex trading is simple!

Yes, we are human beings and we struggle with emotions, which directly conflict with the theory that I tried to make clear in the previous articles. That’s exactly the reason why so many forex traders fail.

However we human beings also dispose of another quality, being adaptable. When we think it’s useful to change a behavioral pattern, it means that we are potentially capable of doing so. It may not be easy to do so any time we want to, but as long as the will is strong enough, we’ll succeed.

I sincerely do hope that these articles will contribute to your conviction that it’s useful to go working on this. Like I said, it will not be that easy all the time, but as long as you keep on developing your attitude, you undoubtedly will succeed.

You’ll have to keep realizing that the reward for your efforts will consequently be a huge one!

Keep repeating, repeating and repeating

Being able to understand the theory of the below mentioned articles already is a very good start. There is a fair chance that in the beginning you’ll be very alert and that you’ll rapidly make progress. However the more you’ll go further, you’re going to notice that some elements of the theory little by little start to weaken as soon as the focus on these aspects is diminishing.

To avoid this process, it’s quite important that you regularly read the below mentioned articles again. This is going to result in you regularly being kept on the alert and thus avoiding a weakening of your attention.

Remember that these aspects are the foundation of your success as a forex trader!

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