News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Real Time News
  • It’s important for traders to be familiar with FX spreads as they are the primary cost of trading currencies. Understand a pair's spread here: https://t.co/zEEUHZBx7g https://t.co/jZHcyAZ5SU
  • Further your forex knowledge and gain insights from our expert analysts on EUR with our free guide, available today: https://t.co/XtydfV5wS6 https://t.co/Iw9haaHAnn
  • The Federal Reserve System (the Fed) was founded in 1913 by the United States Congress. The Fed’s actions and policies have a major impact on currency value, affecting many trades involving the US Dollar. Learn more about the Fed here: https://t.co/ADSC4sr63f https://t.co/raO3gCGqQ6
  • Key levels in forex tend to draw attention to traders in the market. These are psychological prices which tie into the human psyche and way of thinking. Learn about psychological levels here: https://t.co/8A1QhwMVKo https://t.co/rWVlBs6H3c
  • The update to the US Consumer Price Index (CPI) is likely to sway the US Dollar during the Federal Reserve’s blackout period as the central bank braces for a transitory rise in inflation. Get your weekly $USD forecast from @DavidJSong here: https://t.co/JTuP7CLlyi https://t.co/tOvqn3Gdpc
  • Becoming a forex trader means living and breathing the excitement, risk and reward of trading in the biggest and most liquid market in the world. Do you have what it takes? Read here to discover the qualities and processes it takes to build consistency: https://t.co/EfWEACQ6Cz https://t.co/s5dn4ZKnku
  • Becoming a forex trader means living and breathing the excitement, risk and reward of trading in the biggest and most liquid market in the world. Do you have what it takes? Read here to discover the qualities and processes it takes to build consistency: https://t.co/EfWEACyvdZ https://t.co/6VjW5FEiQW
  • Global stocks bounce back from recent pullback as key resistance levels lie ahead. Get your weekly equities forecast from @HathornSabin here: https://t.co/wXSWo1JygD https://t.co/vWVaSEQTXT
  • Do you know how to properly Identify a double top formation? Double tops can enhance technical analysis when trading both forex or stocks, making the pattern highly versatile in nature. Learn more about the double top formation here: https://t.co/t9FlspUVZz https://t.co/9kfBu04auM
  • Dealing with the fear of missing out – or FOMO – is a highly valuable skill for traders. Not only can FOMO have a negative emotional impact, it can cloud judgment and overshadow logic. Learn how you can control FOMO in your trading here: https://t.co/lgDf5ddzFV https://t.co/8GJ6OQYgnW
Guest Commentary: What to do when your system fails?

Guest Commentary: What to do when your system fails?

Yohay Elam, Forex Crunch,

Forex trading systems cannot stay unchanged for too long. Market conditions change constantly and a winning system will eventually start losing. Sticking to the old system while hoping for the winds to change will likely end with a test of the depth of your pockets.

So what can you do?

Assuming that you are generally happy with your system, there are a few things you can do. It’s better to try some back testing, and then demo trading before making these changes on your real account.

  • Switch to a higher time frame: Trading could become so choppy and “noisy”, in a way that your kills your system. On higher time frames, your system could work in a better manner.
  • Switch to another currency pair: If you always stick to the same pair, perhaps the behavior of one of the currencies in the pair has changed, while the other hasn’t. Switching to crosses can be an alternative to the noise created by US events.
  • Modify Stop Loss / Take Profit parameters: This is a small tweak that can make a big difference. It’s important to stress that you keep a normal risk/reward ratio and that you don’t extend the stops while you are trading.
  • Remove one of the indicators: Too many systems use too many indicators. This complicates matters and makes it hard to understand why you won a trade and why you lost one. You might have the instinct to add another technical indicator to add extra validation. As aforementioned, this could only make things worse. Try refreshing your graph with one indicator less.
  • Begin testing a totally different system: After already trying to make the necessary tweaks to your system, perhaps it’s time to acknowledge it doesn’t work and to seek a new one.

What do you think? How do you tweak your systems?

Further reading: 5 Most Predictable Currency Pairs – Q3 2012

By Yohay Elam, Forex Crunch

Would you like to see more third-party contributors on DailyFX? For questions and comments, please send them to research@dailyfx.com

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES