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If
your trading system is
according to positive
expectancy, the only
factors that will
decide how much money
you will earn per year
are in the number of
trades the system
actually makes, how
much capital you choose
to assign to the
system, and how
precisely you use the
trading
signals.
If
you have no idea
whether your trading
system is positive
expectancy or not, then
it doesn’t make sense
for you to be trading
it anyway. Expectancy
is calculated using the
profit or loss on each
trade; divided by the
initial risk, and then
taking the average of
this number of a series
of
trades.
Systems
that do have positive
expectancy will most of
the time make money and
those with negative
expectancy will tend
lose money.
A
successful trader will
only trade systems if
and when the odds of
success are in their
favor, so that they
know that making money
is the end result of
implementing the system
very carefully and not
just based purely on
chance.
You
must minimize all of
your business costs for
trading
Some trading systems
can only offer you
marginal profitability,
and trading
implementation costs
(commission, spread,
and slippage) can be
the difference for you
between making a profit
and making a
loss.
With
the modern electronic
brokers quite simply
available, as well as
fully-automated trade
processing and
execution, it is
absolutely worth the
effort to look for a
very low cost method to
realize your trading
system.
You
can lower high
commission, wide
spreads, and large
amounts of slippage
drastically and easily
if you choose the right
broker with care. This
step can be the
difference between a
system being viable or
not. If you spend too
much for trade
implementation, you
will lose money
unnecessarily.
Educating
yourself
For you to be able to
compete at the highest
levels of the trading
business and be
successful at it, you
must be well-educated
and know what you are
doing. By
well-educated, we mean
that you must
thoroughly research and
test your trading ideas
and know the reasons
why your trading system
worked in the past and
is still working
today.
It
also suggests that you
comprehend all the
applications and
technology that your
system will need in
order to carry out
their job accurately.
Moreover, you must
understand your goal
and objectives and how
trading will be helpful
for you to achieve
them. Lastly, it means
understanding yourself
and how your
personality can and
will have an effect on
your trading
results.
To be
a successful FOREX
trader, you need to
become an expert in
your own trading
business, you need to
understand how it the
various elements are
all connected together,
and when they get
broken, how it can be
improved. Of course,
this will take
commitment, hard work,
dedication, and yet
more hard
work.
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