How To Increase Your Forex Profits With One Simple Step
Nearly all forex traders will usually have their own unique trading system that they use to help them find potential set-ups and actually generate returns. Well this system may be profitable or not, but there is a simple way to increase the profits of any forex trading system.
It’s based on filtering the signals that the system provides you with. What you ultimately want to do is to filter out those positions that are more riskier and those that are less likely to actually make a profit.
If you have been using a trading system for any length of time you will probably know that the set-ups generated by your system will differ greatly and there will be certain trades that you are very confident that they will be winners, and there are others where you are not so confident they will turn out to be profitable.
The key to successful forex trading is to only trade this first category of trades, ie those trades that have a high probability of being winners. This confidence in a trade is usually formed by a number of technical indicators coming into alignment and forming a clear signal, for example, or could be based on previous experience in trading identical set-ups. However when you come to view a trade, there is a simple way you can filter out your set-ups so that you only trade the ones that you have most confidence in.
All you do is to use a ranking system and before each trade give the potential position a confidence ranking out of 10. Now you will probably never have ones which get a 10 rating because no set-up is guaranteed to be a winning one, no matter how strong the signal is, but you should be able to come up with lots of 8s or 9s, for example. These are the ones most likely to generate good returns so a successful strategy is to only trade these high probability positions.
By doing this you are putting yourself in a strong position and at the same time adding discipline to your trading which is one of the key attributes that every profitable forex trader has. Furthermore this simple strategy can turn even the most unprofitable trading systems into profitable ones, particularly if you use sound money management rules, so it’s well worth scrutinising and rating each potential set-up before you decide to actually enter a position.
Click on the following link for free forex tips and strategies, including the exact 4 hour trading strategy that James Woolley uses himself to trade the markets:
http://theforexarticles.com
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