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Trading Only Positive Expectancy Systems

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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