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Free Forex trading system that works

    • 2507 posts
    April 13, 2021 4:26 AM EDT
    Financial markets shouldnt be traded without a sound tried and tested
    trading system, and ­­the Forex market is no exception. Making the right
    trading decisions and finding tradeable setups on the market all depend
    on the rules of your trading system. Without a well-defined system,
    entering the market would more resemble gambling than trading, which
    significantly increases the chances of blowing your account in the
    long-term.To get more news about Forex Trading Strategies, you can visit wikifx.com official website.



      Given the importance of trading systems in Forex, let‘s cover what
    trading systems actually are and what the benefits of defining a trading
    system as a part of a comprehensive trading plan are. In addition,
    we’ll show you a simple Forex trading system that works, based on
    high-probability price action setups on higher timeframes. Lets get
    started.



      What is a Forex trading system?



      A Forex trading system is a set of rules which define how youre
    trading the market. It should include all important points which could
    potentially affect your trading performance, such as a complete set of
    rules for identifying trade setups, risk and money management
    guidelines, types of analysis in changing market conditions, and a way
    of managing your open positions.



      A well-defined trading system is like a road map for the financial
    market. Without a map, you would likely be lost in the wilderness of
    erratic price movements and place trades based on emotion, rather than
    your ratio. Since trading is a highly analytical discipline, hitting the
    market without a map doesnt seem like a wise decision.



      Benefits of having a trading system



      Besides the set of rules which define all actions taken on the market,
    having a trading system also has some additional advantages which
    cannot be neglected. First and foremost, trading on strict and detailed
    rules as a part of a trading system prevents you from placing emotional
    trades and increases your discipline.



      Emotions, such as greed and fear, are well-known enemies of rational
    trading which often attack beginners – mostly those who dont have a
    detailed trading plan. As a result, greed and fear interfere with your
    trading decisions and cause you to chase the market for trading
    opportunities, even if no setups exist. Your mind will try to convince
    you to take a trade in the hopes of obtaining potential profits, without
    taking into account the risks associated with the trade. Fear, on the
    other hand, often leads to closing a profitable position too early and
    letting your losers run, in the hopes that the price will reverse to
    break even. When using a trading system with strict rules, these
    mistakes can be easily avoided.



      Trend-following trading system on higher TFs



      One of the best Forex currency trading systems are trend-following
    systems which aim to take trades only in the direction of the underlying
    trend. This way, riskier counter-trend trades based on price
    corrections can be avoided, and price corrections are only used to enter
    with a market order when prices are relatively oversold during
    uptrends, or relatively overbought during downtrends.



      This system uses higher timeframes, such as the 4-hour, daily, and
    weekly timeframes, and utilises a multi-timeframe analysis to identify
    the overall market trend.



      Chart patterns are also an important part of the system, since these
    patterns are often used to find tops and bottoms of trends and to
    identify potential trend continuations.



      To enter with a long position, all three timeframes (weekly, daily,
    and four-hour) need to align and to show an uptrend. This might require
    some experience, as some of the timeframes may contradict each other,
    even though the overall trend is still intact.



      1) The weekly timeframe needs to form higher highs and higher lows
    during uptrends, and lower lows and lower highs during downtrends. The
    weekly timeframe is only used to identify the overall trend in a
    currency pair, not to spot entry and exit points.  2) The daily
    timeframe needs to show a tradeable setup, based on price action tools
    such as channels, trend lines and chart patterns. All of the tools
    should confirm a trade in the direction of the overall trend, as shown
    on the weekly timeframe. Fibonacci retracement tools also play an
    important role in this system, as we want to buy low and sell high.
    Multi-timeframe analysis is extremely important, as an uptrend on higher
    timeframes may look like a downtrend on shorter timeframes.



    If the daily chart is in a downtrend, but the weekly shows an uptrend,
    make sure to draw a Fibonacci retracement tool to identify the potential
    levels where the correction might end on the daily timeframe.
    Everything between the 38.2% and 61.8% Fib retracement levels can be a
    good point to enter in the direction of the overall trend.



    3)Finally, zoom-in to the 4-hour chart to find potential entry and exit
    levels for the trade, as well as stop loss levels. Recent swing highs
    and swing lows, horizontal support, and resistance levels, channels, and
    trend lines (from the daily timeframe) can all point to levels to enter
    into the trade. Since a complete trading system also factors in risk
    and money management, make sure that your trade setup returns a
    satisfying reward-to-risk ratio of at least 1 or preferably higher.