Guest post by Michelle Custodio
Top 5 Considerations to Find the Best Trading System for You
Start the new year off the right way by finding the best trading system for your own particular needs. Taking the time to pinpoint this sometimes-elusive arrangement can reduce the amount of time you spend bumbling through your trades. It can also help you meet your goals more easily. Not only that, the best trading system will encompass those ideals that you value most enabling you to feel at ease with your trading decisions. In order to do so, keep the following X five considerations in mind:
- What Works for Someone Else Might Not Work for You
Just because a trading system works well for your neighbor, best friend, sibling, etc. etc. does not mean that it will provide you with the same — or even similar — results. Just like you might consider a reclusive mountain retreat to be the best type of vacation while someone else could long for the pulsating and never-ending activity of a New York City getaway, so is no one method the best ever for everyone regardless of their circumstances.
- How Often Do You Want to Trade?
Having the flexibility to be able to choose when and how often you can trade could be a deal breaker for you. Choosing a trading system that restricts that is likely to feel confining to you and make you chafe a bit at the lack of control that you have. On the other hand, if you are the sort of person who wants to have a set schedule, being able to trade a limited number of times without penalty could work in your favor.
- Determine Your Risk Comfort Level
Finding that fine line between too much risk in your trades so that you potentially lose it all and not enough risk so that you are not able to achieve your goals can be a balancing act. It is crucial, though, in being able to find the right trading system as the variations among them differ wildly. That being said, it is vital to keep in mind that no trading system is risk free. The trading market is fraught with unpredictable events and frequent changes. That understanding is a key element in realizing exactly how much risk you are comfortable undertaking.
- Outline your Goals
Of course, the ideal situation would be a trading system that allows you to realize a nearly perfect, 100 percent success rate. However nothing is guaranteed in the trading industry, and success rates of such magnitude are rare indeed. Many people find that instead of having a strict percentage that they like to achieve, they have a range that allows them to aim for a ballpark figure. Another thing to keep in mind is that often the higher the success rate, the more risk that you will need to undertake in order to achieve that rate.
- Taking the System for a Test Drive
Being able to try a system out before you make a commitment can do a great deal to set your mind at ease. This is particularly true for those systems that are pretty new and that have little data that you can study. Doing so allows you to get a feel for its short- and long-term projections. Another instance in which it could be beneficial to test drive a trading system is when you are considering one that encompasses complex elements that can be difficult to fully utilize and understand until you are able to actually try it out. There may be some trading systems that do not lend themselves to a trial. Or the backers might not be open to the idea. However, if the idea appeals to you, it behooves you to inquire about it.
The moral of the above advice can be boiled down to one sentiment — there is no perfect trading system that works for everyone. Even following the above advice, you could find that the trading system that works well for you when you were in your 20s, does not fulfill your goals once you reach your 30s and beyond. You need to perform regular checks on your risk comfort level, goal attainment figures and success rate to prevent stagnation within your market portfolio.