Build Your Own Trading Method (Part 1 Introduction)
Meet Harry
Harry just released his trading system on a popular Forex forum. Harry's system works very well for him. He wins 8 in 10 trades with it and has made a lot of pips. He decided to release the system so he could help newbie's make pips.
Meet the Newbies
The newbies just found Harry's system. It's the latest craze and everybody is trying it.
Is the system working for everybody though?
No it isn't.
Why does Harry's system work for him but not so well for others?
- He developed the system and it suits his personality.
- The system suits his skill set and makes use of his strengths.
- He knows the ins and outs and isn't as rigid with the rules.
A trading system is just a tool. What makes it work is the trader behind the system. The trader dictates whether the system works or fails. When you take a tool that a trader custom builds and try to use it in your trading you will likely find it difficult.
Does this make you a bad trader?
No it simply means that you do not have the same skill set as the person who developed the system. It means that you need to develop a system that plays on your strengths and suits your personality.
Why should you develop your own method?
There is no one size fits all trading system. Over the past few weeks I have been asking newbie traders a question:
Q.What do you think is the single most important factor to a traders success?
Not surprisingly most newbies answer 'a good trading system'. It is exactly this mindset that has newbies jumping around from forum to forum looking for the latest Holy Grail system. However, as I have already said there is no one size fits all system so searching forums for the latest and greatest only leads to failure.
To succeed in this market you need to develop your own trading method; a method that works for you and is suited to your personality. To be honest it is not just a simple process it does involve a lot of trial and error but at the end of the day it will make you successful. It is a whole lot better than wasting your time jumping from forum to forum.
Think about it this way. You can run off with the pack, trying ever new system posted on a forum, and always ending up back where you started. Or you can spend that time developing something that works for you; a method that is perfectly tailored to your personality and makes use of your strengths.
After all, 95% of traders fail. So if you run off with the pack and do what 95% of traders do it can only end one way.
In the next article, in this series, I will discuss the difference between a method and a system. I will also discuss the first steps in creating your own method.
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