2Bull Forex Blog

Many traders buy currency trading systems from vendors but its easy enough to build one yourself if you follow simple steps below. The system below is simple, will never go out of data and is robust and will produce big profits.

Let’s take a look at how to build currency trading system that can and does produce big gains.

1. Big Profits from the Bigger Moves

Here we are going to look at a trading system that will catch the bigger moves that can last for weeks or months - these are where the big profits are made and there the trends you should focus on.

2. Trade Breakouts

As a methodology trading breakouts is simple and proven, most of the world’s successful traders incorporate breakouts in their trading.

It’s a fact that most major moves start from new market highs and by buying a high when important resistance is broken means the odds of a continuation and acceleration of the break are high.

If you learn to buy these breakouts then you can make a lot of money.

Most traders hate buying breakouts because they want to buy the dip and wait but of course they don’t get in as on the big breakouts prices do not pullback.

Generally, if you trade breakouts be careful to only trade breaks that are considered important by the market and this means - several tests and preferably, these tests should be weeks or months apart.

3. Timing Your Trading Signal

The big breakout trends don’t come around very often - but when they do, you need to decide if the breakout is a true or false one.

For this you need to confirm the breakout with some momentum oscillators.

If you don’t know what they are now is the time to learn. We like the ADX, RSI and stochastic which are outlined in our other articles.

Just get a couple you like that will help you confirm the breaks - if they are up when the break occurs you go with the break - if there not wait - its as simple as that.

4. Placing Stops & Money Management

At the end of the day session, you simply put your stop below the breakout point.

Many traders make the mistake of moving stops to quickly - make sure you keep yours at entry and don’t start to trail it, until the move is well under way.

Many traders make the mistake of trying to restrict risk so much they create it - don’t make the same error - give the market room to breathe.

If you try the above, you have a robust currency trading system that’s easy to understand and therefore easy to apply and as your trading the big moves, it will only take you 30 minutes a day or less to run.

It may sound simple - but that’s the beauty of it.

It’s easy to understand, breakout logic never goes out of date and it’s easy to apply with discipline, as you can have confidence in it.

Unlike a complicated currency trading system, this one has very few elements to break in the real world of forex trading. Its a known fact that simple systems work better than complicated ones and all thebest trading systems are simple.

I have been using the above system for 5 years and yes it is simple - but over the years it’s caught me my fair share of mega trends and has made me a lot of money.

If you want to trade forex you need a forex broker and there are plenty around, here we will give some tips on picking the best for forex brokers and how to maximize your potential with them.

Many traders see brokers as the enemy who lose them money but the fact is there neither your friend nor your enemy - their simply there to transact your orders in an efficient, cost effective and timely manner and that’s it.

The most important points to consider when dealing with a broker are the following:

1. Competitive Spreads

Pay no more than 5 pips on the majors and if you shop around you can get 2 - 3. This is your cost of doing business and needs to be kept low.

2. A Reliable Trading Platform

If you are trading online this is imperative and most trading platforms today are excellent - but make sure you test drive it, for usability via a demo account to prove it to yourself.

3. Leverage

Any broker today will give you more leverage than you will ever need. 100:1 is fine - but many brokers will go up to 400:1.

4. Security OF Funds

Look for well established brokers who use segregated accounts have been in business for years rather than months. The longer they have been in business and and the bigger they are the better.

What You do NOT Want From a Broker

A lot of brokers sell higher fees based upon the service they give you in terms of trading recommendations etc.

Keep this point in mind - if brokers were good at trading they wouldn’t be brokers, ignore them and execute your own trading signals.

Useful EXTRA Services

Some brokers give extra services away that are useful such as discounts on trading tools, books and newsletters which a lot of traders like - but there is one service we saw recently which is excellent for novice traders and it’s called:

A PROTECTED ACCOUNT

If you are new to forex trading, then you will probably try a demo account to get the feel of trading but useful as they are for learning the mechanics, they don’t replicate the feeling of dealing with real money.

Many brokers to help get novices feet wet with limited risk offer Protected Accounts, to act as a bridge between a demo account and a full trading account.

They allow traders to trade with small amounts of money and do as many trades as they like in a set period (normally a couple of weeks) and the trader can still trade even if he is debit!

At the end of the period the broker covers the losses if any and the trader takes the profits.

This means a trade as much as he wants - even when he is debit on a set leverage and has a set risk in advance.

These accounts give the feel of forex trading but have set risk and will show a forex trader his potential, before moving to a full trading account.

Finally ..

Getting the right forex broker is easy and you only have to keep a few points in mind and then you’re all set, to enter the exciting and lucrative world of currency trading.