Whether you are looking into Forex trading as a newbie, or if you have some experience, there are probably still some questions that you have. One of those may well be, “which is the best Forex trading system for me?”
Well, before we get into which of them are the better options, we need to look into why you may want to use a trading system. Of course, the primary reason is that you want to gain the maximum effect that you can through all of your trades. Trading systems are extremely useful at helping you, as a Forex trader, to gain a better insight into the current situation of the market. Furthermore, they will help you with a personal analysis of the currency sets that you work with, giving you a better idea of when to buy or sell.
There are two primary options that you have to choose from when you are looking at these trading platforms. They are either manual or automatic. Neither of them is “better” than the other; they are different. Therefore, they have their own benefits and downfalls. Knowing which is which, and suitable for what will give you the upper hand in selecting the right trading system for you.
How To Choose The Best Forex Trading System For You
So, the first thing that you may wonder is why is it best for me? Why can you not give me the most profitable trading system and be done with it? Well, that is a little easier to explain. Not all trading systems will fit with everyone 100% of the time. We all have different lives, with various “trading personalities.” Trading personalities are a huge factor that you have to consider when you are looking at any Forex trading system. The reason for that is because you have to know and understand your limits, along with the requirements of the system that you want to use.
Here are some of the things within your trading personality that you have to take into account:
- Type of trading system. - There is no way that I can fit all of the categories and subcategories into one article. However, you need to understand the types of trading strategies that you can use. For example:
- Day Trading
- Position Trading
- Swing Trading
Within these, you also have subcategories, such as trend trading and counter-trend trading. Therefore, do some research and pick the style that you think may fit you the best.
- Schedule. - Some people have all the time in the world to sit for 14-18 hours a day in front of the computer screen, monitoring every single move that the market makes. Others only have a few hours a day where they have to make more significant, more substantial decisions. Or, some can get impatient waiting for more extended periods for long term trades. Therefore, you may be better at day trading.
- Discipline. - Everyone has some sort of struggle with control at some point or another. It is how well you can deal with it that makes the difference. If you get too tired, you could fall asleep and miss the perfect opportunity. However, there are also people who make plans and then don’t follow them and get jumpy and trade too early.
- Following others’ footsteps. - Everyone who learns something will see a method that someone else has used and gained massive profits. However, following those steps to the letter will probably not give you the same result.
- Preconceived Ideas. - When you are learning something, you will get some ideas that you think are right and wrong. Even if you try not to, you still will. You need to have a completely open mind when it comes to trading, and you need to expect the unexpected.
- Faith. - Faith is a huge player in the Forex trading system that you pick. If you have no faith, you will not succeed, no matter if it is the best system or not.
The Best Manual Forex Trading Systems
Because of some of the points that we have listed above, we have decided that manual trading systems are the better way to get into trading Forex. That is because you have all of the control over what to do and when. In contrast, automated systems follow a set of rules that someone else created. While you may think that that will help you, it is likely to be more of a hindrance. Suppose you have less time than the person who created it, or lower discipline, or preconceived ideas that clash, etc. then you are likely to fail at their system. That is why we are here to help by giving you a rundown of the best Forex trading systems to start you off.
Scalping is a Forex trading system that requires quick successions of trades within short periods in order to gain a profit. Most people within the Forex scalping community will make a large number of deals, both sales, and buys, in a single day to try and take advantage of all of the ups and downs that the market sees in the day. You are unlikely to gain considerable profits in single transactions with scalping. However, if you have the time to put into trading in this way, you may make a lot of money over a more extended period.
Scalping is a system that can be either manual or automated. In this article, we are talking about all of the manual methods, so we will ignore the aspect of the automated system. For the manual system to work efficiently, the trader will need to sit in front of a computer for many hours a day, looking for signals indicating whether you should buy or sell.
Swing traders typically wait for a few hours instead of minutes like a scalper does. They try to identify swings with a medium-length term in mind. The primary difference with swing trading to day trading, other than the time, is that you need a lot more patience. Not only do you need the patience to wait out longer trades, but you need to stay calm even when deals start to move against your hopes.
Swing trading is often one that you can do if you have less time than with day trading. However, you still need to have enough time to analyze the markets for potential changes that could be in your favor.
Long-Term Position Trading
Long-term trading is precisely how it sounds - the same trading principles as scalping and swing but over a more extended period. Within long-term trading, there are two strategies that are favored over others. We will look into those in a little detail next. However, the basis of them is that you use long-term trends to buy and sell, and they are often much less risky than either of the other types.
- Set and Forget. - All you need to do here is to buy when the price is low and sell when it is high. However, you can pretty much forget about the price for days, weeks, and even months. You can do this in a manual way, by checking the price every day or so, or you can automate it through set parameters. Manual is more work, but again, as we have already said, you have a lot more control over when you exit a trade, and when you enter one.
- Supply and Demand. - When the market has a sharp incline or decline, that is often because of either supply or demand requirements. Advance is demand; a retreat is a supply stage. Buying in a retreat and selling in demand is the name of the game and the way that you are likely to gain some profit.
If you have a lot less time to trade than with the other two fundamental principles, you will be better off trying long-term position Forex trading systems. However, you do need to understand that you should not attempt this if you have trading anxiety and check the prices regularly. That can make you pull out of a trade far too early, meaning that you are changing your system without meaning to.
Best Forex Trading System - Conclusion
The first point that I would like to say is that I now hope that you can see why there is no “best Forex trading system.” Choosing the one that is right for you is entirely individual based on your timeframes that you have available and how you feel when you are trading. However, there are a few things that you need to keep in mind. If you:
- Have a long time to trade, enjoy short bursts of trading, and want more of a thrill, choose scalping.
- Have some time, but not as much as scalpers, but still want to enjoy something that is somewhat fast-paced, choose swing trading.
- Have a lot less time, and a lot more patience, choose one of the long-term position trading options.
There are other options within those main categories, but this is a general rule of thumb that you can use to start you off in the right direction. Other than that, read some books about it, we have an article about the best Forex books for beginners, here.