How to Find a Day Trading Program that Works
 
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jones
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Post: #1
02-14-2018 03:45 AM

Trading with a system can dramatically boost your likelihood of earning money in the markets.

The next problem would be to find a daytrading program that works. To-day you've the opportunity to pick from more than 300 trading systems available. Regrettably just a large number of them are trading profitably.

Within the next 3 minutes I'll present you the 10 Power Axioms for Successful Daytrading Systems, which will assist and assist you in your research.

Theory #1: Few rules - straightforward

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

It is important your rules are easy to understand and perform. The markets may go quickly and react very wild, and you will not have enough time in order to make a trading decision to assess complex formulas. Think about successful ground traders: The only instrument they use is just a calculator, and they make tens of thousands of dollars every single day.

Concept #2: Trade electric and liquid markets

We strongly recommend that you trade digital markets because the profits are lower and you receive instant fills. You have to know as quickly as possible if your order was filled and at what cost, because according to this information you plan your exit.

Before you know that your access order is filled you should not place an exit order. You might have to wait awhile before you get your fill when you deal open outcry markets (non-electronic). By that point, the marketplace may have already turned and your lucrative industry has turned right into a loss!

You obtain your floods within just one second and could quickly place your leave instructions when dealing e-lectronic areas. Dealing liquid markets you can avoid slippage, that'll save yourself you hundreds if not thousands of dollars.

Concept #3: Make regular gains

You must always look for a trading system that provides a nice and clean money curve, even though in the future the internet gain is slightly smaller. Most professional investors would rather get small profits every day in 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 frequently deposit profits into your trading account.

Making regular profits will be the secret of successful investors!

Theory #4: Maintain a wholesome balance between risk and reward

I would like to give you an example: If you search for a casino and bet everything you have on 'red', then you have a 49% chance of doubling your money and a 51% chance of losing everything. The exact same relates to trading: You could make a lot of money if you are risking a lot, however risk of damage is quite large. You have to find a healthy balance between risk and reward.

Let us say you define 'destroy' as dropping 20% of one's consideration, and you define 'success' as making 20% profits. Having a trading system with past performance results allow you to estimate the 'risk of ruin' and 'chance of success.'

Your risk of damage should be always significantly less than 5%, and your chance of success should be 5-10 times greater, e.g. if your danger of damage is 4%, then your chance of success must be 40% or more.

Principle #5: Locate a program that creates at least five trades weekly

The bigger the trading frequency small the likelihood of having a losing month. If you have a trading system that has a winning percentage of 700-watt, but only produces 1 business per month, then 1 loss is sufficient to have a month. In this case, you could have many losing weeks in a line before you finally start making money. Meanwhile, how do you pay for your costs?

If your trading system creates five trades per week, you then have on average 2-0 trades per month. Having a winning percentage of 700-watt - your chances of a month are extremely large.

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

Theory #6: Start small - increase big

Your trading system should permit you to start small and grow large. A good trading system lets you start with one or two agreements, and then raise your situation as your trading account increases. This can be contrary to several 'martingale' trading systems that want increasing position styles when you are in a losing streak.

You probably learned about this strategy: Double your contracts every-time you drop, and one winner will win back all the money you previously lost. It is maybe not unusual to get 4-5 losing trades in a line, and this could already need to trade 16 deals after just 4 losses! Dealing the e-mini S&P you'd then need a free account size of a minimum of $63,200, just to meet with the margin requirement. That is why martingale programs do not work.

Principle #7: Automate your trading

Emotions and human problems are the most frequent problems that professionals make. By all means you've in order to avoid these errors. Especially during fast areas, it is critical that you determine the entry and exit points fast and accurately; otherwise, you might miss a trade or end up in a losing position.

Therefore you need to automate your trading and locate a trading system that either already is or can be automated. Automating your trading makes it free of human feeling. The buy and sell operations are automated, hands-free, without manual interventions and you could be sure you make profits when you should according to your program.

Theory #8: Possess a high-percentage of winning positions

Your trading strategy should make over 50 winners. There's no doubt that dealing systems with smaller winning percentages could be profitable, too, but the psychological pressure is tremendous. Getting 7 losers from 10 investments and not doubting the machine requires excellent discipline, and many investors can't stand the stress. Following the sixth loss they start 'strengthening' the system or stop trading it entirely.

Especially for beginners it is a big help in case you have a higher winning percentage of more than 65% to gain confidence in the body and your trading.

Principle #9: Choose a program that is examined on a minimum of 200 investments

The more deals you utilize in your back-testing (without curve-fitting), the greater the possibilities that your trading system can achieve the long run. Look at the following table:

Number of Trades 5-0 10-0 200 300 500 Margin of Error fourteen days 10-7 66-42

The more deals you've in your back-testing, the smaller the margin of error, and the higher the likelihood of making gains in the future.

Concept #10: Decided on a logical back testing period

I recently found the next ad: 'Since 1994 I have taught a large number of investors worldwide a Simple and Reliable E-Mini trading methodology.'

Thus, none of the deals existed before 1997, that's very interesting, since the e-mini S&P was introduced in September 1997, and the e-mini Nasdaq in June 1999. Be taught more on our favorite partner portfolio by going to small blue arrow. What type of e-mini trading did this vendor show from 1994-1997???

The same applies to your back testing: If you created an e-mini S&P trading method, then you must back test it only for days gone by 2-4 years, because though the contract has existed since 1997, there was almost nobody trading it (see chart below ):

Now you understand how to separate the fraud from good working trading systems. By making use of this record you will easily determine trading programs that work and those that will never make it.

Writers name

Markus Heitkoetter

Author's Info:

Markus Heitkoetter is a 19-year veteran of the markets and the CEO of Rockwell Trading. For more free information and tips and strategy steps to make steady profits with online daytrading, visit his website http://www.rockwelltrading.com..
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