Does exist profitable system?

Hello, I need a advice from experienced traders. Unfortunatelly I am one from 80% unsuccussful traders. Even though I do forex many month, but I still loose money. I dont know which way should I go. Pls give me some comfortable advice or help.
p.s. I dont know any traders who earn money in the long term. What about you? Thanks a lot

Well I am sorry to hear about your experiences in forex trading and as you are aware you are by no means in the minority with your experiences.

The first thing I would say is immediately stop trading. You have not said that much regarding how you trade but clearly the ship is heading into the rocks so if I were you it is time to stop trading and start to learn how to navigate a better course rather than continue blindly on a course to ruin.

There is no 100% profitable system this is not realistic. Trading is not an easy business and it is certainly not as simple as learning someone elses entry and exit rules. If it was then everyone would be doing it.

So my advice would be to stop looking at different trading systems. It is easy to get swamped with various trading systems on all the different forums.

So where is a good place to start - I think that a traders mindset has to be set on the right course from the beginning. It is said that trading is 80% psychology yet most traders spend 80% of their time in pursuit of a system or method. A trading model is important but before we talk about that lets talk about the mindset.

Firstly losses are part of the course - there can be no way around this. Learning to deal with them is far easier said than done. But there are steps we can take in order to make losses more palatable. And this brings me to what in my opinion is vital to success - RISK MANAGEMENT.

Before even thinking of trading in a certain method or system risk management needs to be at the forefront of your thinking.

How much are you prepared to lose as a percentage of account equity per trade? Some say 3%. I would say if you are just starting out in trading then I would suggest you look at a much lower figure. Lets say 0.5%. Okay that sounds so small and you will probably not make $1million dollars in year one but the good news is with maximum trade risk of 0.5% then even if you experience 20 losing trades in succession you will only be down 9.54% of account equity. Compare this to risking 3% of account equity per trade and 10 losing trades in a row will mean a drawdown of 26.26%. PRESERVATION OF CAPITAL has to be at the front of your thinking when trading. This may mean that you have to find a broker that will allow you to trade small amounts but if that is what it takes then so be it. If you start with small risks per trade say 0.5% your chances of still being a trader 12 months from now is far greater. As you mentioned that you are new trader then this is a learning phase and capital preservation is the order of the day. Many new traders blow their accounts through reckless trading and not maintaining a disciplined approach to money management.

Now that we are defined risk lets look at the other side of the coin - REWARD. Again we have not looked yet a trading system we are still getting the mind right with regard to risk management. It is true that when we enter a trade no one can say with 100% certainty which way it will go - this is one reason why we define the trade risk before we enter the trade. The other side is looking for reward. How much should we look for? What is realistic. I would say that whatever trading strategy you choose to adopt you should be looking at trades that have at least a 2:1 risk/reward probability. Of course it is only probability - no one can say for certain but you have to be looking for trades that will give you more than you are prepared to risk. There is another common phrase in the trading world - 'cut your losses short and let the winners ride' - again easier said than done. In fact human nature seems to do the opposite and if you are willing to win less than you are prepared to lose then someday soon you will have a zero equity balance.

I am not going to tell you what method to trade. If I was you study study study the area of risk, money management, risk of ruin, probability and discipline. Whilst methodolgy is important it is these areas that will keep you in the game in the long run. Become obssessed with risk management and capital preservation before even spending the time looking at systems. If people spent half as much time studying risk rather than fancy indicators that would increase their survival chances dramatically.

Finally, don't give up. You can become a successful trader - it is not going to be easy but if you want it bad enough you can do it.

This is just my 2 cents worth and hope it helps you a little.

Monaco

Monaco, This is an outstanding post and very good advise... thanks for taking the time, Scott

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Monaco you said all I wanted to say. Excellent post.

I agree with Monaco.... The pstchology is so important.... This leads me onto my 2 cents :-).

When you find a system that you have backtested and found works for you then stick to it. Even through the bad times and believe me they will come. You just need the confidence in your system to say that even if I lose 2,3,4,5 trades in a row my system works and I will stand by it.

I read a post somewhere on this forum where someone said you should treat your relationship with your system like a marriage.

Understand that it won't be smooth 100% of the time but if it is right 70-80% of the time and that is enough to be profitable then thas enough.

As soon as you fall into the trap of trying a system... then as soon as it goes bad for a few trades, dropping it and start searching for a new one you will take ages to come back out into te light again. Because the fact is you won't find a system that is 100%, but you will find a profitable system!!!!

Ive just sent u a pm. read it please. it will help you.