How to Use a Forex Trading System for Locking in Profits

By Mark Solomon

Cutting loses of bad trades and riding profitable trades is much easier with a well developed forex trading system. Decisions such as overall trading strategy along with market focus must be integrated into the forex trading system software in a thorough fashion or the software can end up as a destructive tool to an investment portfolio. The basics of profit percentages, instant order development, sell triggers, and high profit probability entry points can all be automated through currency trading systems or FX trading systems. Focusing on key areas forming the foundation of foreign currency trading like currencies to trade i.e. USD/YEN, how much margin to use from 0 to 100, plus when to actually enter the market will provide the basics of a forex trading system. Software running on high-speed, secure computers can execute these decisions perfectly every time and make forex trading profitable even in non-trending markets.

There are 5 key points for setting up and using FX or forex trading software

1. Take the forex trading strategy and write it down in single phases that define actions required. Analyzing for currency pairs to trade could be one step.

2. Take each decision area of the forex trading system or method and outline it such as analysis, margin decisions, reversals and trend forecasting, whether major or exotic pairs, and selecting when to buy in and when to sell out a position.

3. Place the steps defining the currency trading system or fx trading system into a table in exact order of execution. Often this will result in repeated blocks for analyzing positions, shifting stops for each trading position, and changing exit points. This is the nature of a forex trading system. Currency trading is fast cycle trading and requires an iterative approach.

4. With a table of steps defining the method for forex trading, the actual encoding of these steps is straight forward. Most currency trading screens have a trade entry screen with drop down menus for each currency. Then there is the leverage screen or this may be set when the forex trading account is opened. The real challenge comes with automating the analysis for when to enter and exit positions. One of the simpler, but still effective method is limit setting. When a currency pair moves beyond a certain limit as shown on the currency trading screen, have an alarm triggered or a trade triggered. While this is an old and simple method for trade automation, it can be effective for trend traders or reversal traders.

5. Testing the system is the most important step. Even after all the decision and analysis criteria are coded into the system, there are conditions the software does not decision criteria for perhaps, or possibly it is missing too many profit opportunities. In either case, untested currency trading systems can put a portfolio at risk. Test and test again. - 23208

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