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Where to find every Day Trading System that Works

Trading with a system can dramatically improve your likelihood of making money in the markets.

The following challenge would be to locate a program that works. You've the chance to choose from more than 300 trading methods available to-day. However just hundreds of them are trading profitably.

Within the next 3 minutes I will provide you the 10 Power Principles for Successful Daytrading Systems, which will assist and help you in your study.

Principle #1: Few rules - easy to understand

It might surprise you the most readily useful daytrading programs have less-than 10 principles. The more rules you've, the more likely you 'curve-fitted' your trading system for the past, and this over-optimized system is very unlikely to make profits in real markets.

It's important that your principles are easy to understand and execute. The markets can react very wild and go fast, and you will not have enough time to be able to make a trading decision to assess complex formulas. Think of successful ground traders: The only tool they use can be a calculator, and they make tens of thousands of dollars each day.

Concept #2: Trade digital and liquid markets

We strongly recommend that you trade electronic markets because the profits are lower and you get instant fills. You need to find out as fast as possible if your order was filled and at what cost, because according to these records you plan your exit.

Before you realize that your entry order is filled you should never place an exit order. You may need to wait a-while before you receive your fill when you deal open outcry markets (non-electronic). By that point, the market may have already turned and your profitable trade has turned right into a loss!

You obtain your floods within just one 2nd and could instantly place your exit requests when trading e-lectronic areas. Trading liquid areas you can prevent slippage, that will save yourself you hundreds if not tens of thousands of dollars.

Principle #3: Make regular earnings

You must always look for a trading system that provides a smooth and nice money curve, even when in the long term the net pro-fit is slightly smaller. Most professional dealers choose to get little profits every day in the place of large profits every now and then. If you trade for a living, you must pay your expenses from your trading profits, and thus you should regularly deposit profits into your trading account.

Making steady profits may be the secret of successful traders!

Rule #4: Maintain a healthy balance between risk and reward

Let me give you an example: If you go to a casino and bet everything you've on 'red', then you have a 49% chance of doubling your hard earned money and a 51% chance of losing everything. Exactly the same relates to trading: You can make a lot of money if you're risking a lot, however threat of ruin is quite large. You must find a healthier balance between risk and reward.

Let's say you define 'ruin' as losing 20% of the account, and you define 'success' as making 20% gains. Having a trading program with past performance results enable you to assess the 'risk of ruin' and 'potential for success.'

Your risk of ruin should be always less than 5%, and your chance of success should be 5-10 times larger, e.g. Your potential for success ought to be 40% or maybe more, if your threat of ruin is 4%.

Rule #5: Locate a process that provides at least five trades each week

The higher the trading frequency the smaller the likelihood of having a losing month. If you have a trading system that has a winning percentage of 70%, but only provides 1 business per month, then 1 loser is sufficient to have a losing month. In this case, you may have many losing weeks in-a line before you finally start making profits. In the meantime, how do you pay for your charges?

If your trading system produces five trades per week, then you definitely have on average 20 trades per month. Having a winning percentage of 700-800 - your likelihood of a winning month are extremely large.

That's the aim of all traders: Having as many profitable months as possible!

Theory #6: Start little - increase big

Your trading system must allow you to start small and grow big. An excellent trading system lets you start with a couple of contracts, and then improve your position as your trading account grows. This is in contrast to several 'martingale' trading systems that want increasing situation styles when you're in a losing streak.

You probably heard about this strategy: Double your contracts everytime you drop, and one winner will win back all the money you previously lost. It's not unusual to have 4-5 losing positions in-a row, and this might already need to trade 16 contracts after just 4 losses! Trading the e-mini S&P you would then need a merchant account size of a minimum of $63,200, simply to meet up with the margin requirement. That's why martingale systems do not work. Dig up extra info about small blue arrow by going to our surprising portfolio.

Concept #7: Automate your trading

Emotions and human problems would be the most frequent problems that traders make. By all means you have in order to avoid these problems. Specially during fast markets, it is important that you determine the entry and exit points accurately; and fast otherwise, you might miss a trade or end up in a losing situation.

Thus you need to automate your trading and choose a trading system that both already is or can be automated. Automating your trading helps it be free from human feeling. The buy and sell procedures are typical automated, hands-free, without any manual interventions and you can be sure that you make gains when you should according to your program.

Principle #8: Have a high-percentage of winning trades

Your trading strategy should produce over 506 winners. There's little doubt that dealing systems with smaller winning proportions may be rewarding, also, but the mental force is tremendous. Getting 7 losers out of 10 investments and not doubting the machine takes excellent discipline, and many investors can not stand the pres-sure. After the sixth loss they begin 'improving' the device or stop trading it com-pletely.

Especially for beginners it's a large help when you have a higher winning percentage in excess of 65% to gain confidence in the body and your trading.

Theory #9: Locate a system that's tested on at the least 200 trades

The more investments you employ in your back testing (without curve-fitting), the greater the probabilities that your trading system can succeed in the near future. Look at the following table:

Number of Trades 5-0 100 200 300 500 Margin of Error fortnight 10% 7% 66-42

The more investments you've in your back-testing, the smaller the margin of error, and the greater the possibility of making profits in the future.

Theory #10: Chose a logical back-testing period

I recently saw the next ad: 'Since 1994 I've taught tens of thousands of investors global a Straightforward and Reliable E-Mini trading system.'

That's very interesting, because the e-mini S&P was presented in September 1997, and the e-mini Nasdaq in June 1999, therefore, none of those contracts existed before 1997. What sort of e-mini trading did this merchant teach from 1994-1997???

The exact same applies to your back testing: If you developed an e-mini S&P trading strategy, then you should back check it just for the past 2-4 years, because even though the agreement has existed since 1997, there is practically nobody trading it (see chart below ):

Now you know how-to separate the scam from great working trading systems. By applying this checklist you'll quickly identify trading programs that work and those that will never make it.

Authors name

Markus Heitkoetter

Author's Info:

Markus Heitkoetter is the CEO of Rockwell Trading and a 19-year veteran of the areas. For more free information and recommendations and secret how to make steady profits with online daytrading, visit his website

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