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How to determine a good trading system?

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Do Thanh Tu
122
Do Thanh Tu  

Hi guys,

What is the key to determine whether the system is good or not?

I plan to be come a signal provider, I would like to consult your ideas.

Thanks in advance

Keith Watford
Moderator
10378
Keith Watford  
forex4viet:

Hi guys,

What is the key to determine whether the system is good or not?

I plan to be come a signal provider, I would like to consult your ideas.

Thanks in advance

A system is good if it consistently returns profits without excessive risk

Martingale strategies do not fall into this category as they will always at some time involve excessive risk  

Do Thanh Tu
122
Do Thanh Tu  
Forexample:

A system is good if it consistently returns profits without excessive risk

Martingale strategies do not fall into this category as they will always at some time involve excessive risk  

Thanks. I have the same point if view. Martingale and price averaging also is not trading system.

How about the R:R ratio, Drawdown and gain percentage?

Abdul Salam
2836
Abdul Salam  

forex exchange is very risky business  . . . .

try to expert ur self in one currency and then create ur own signal . . . .

if u were good enough to do profit . then comunity member will buy ur signal 

Rony Sentiko
120
Rony Sentiko  
Do Thanh Tu:

Thanks. I have the same point if view. Martingale and price averaging also is not trading system.

How about the R:R ratio, Drawdown and gain percentage?

R:R is good. I use 3 reward : 1 risk. So I can recover my drawdown with winning trades.
JD4
1101
JD4  
Some people will tell you that their winning trade percentage is better than anyone's.  While that might be true, if your system has a 99% win rate (winning trades to losing trades), but you wipe out 50-60 winning trades with 1 bad one, then the system isn't really so good.  The important ratio is dollars (or whatever your currency used in your country) won to dollars lost.  Obviously, the intent is always to bring in much more than you pay out.  Slippage can and will happen, fact of trading, from what I have been able to tell.  As are spreads and drawdowns.  The trick is to make it so your system brings in more, consistently, than it loses in those amounts.  It doesn't matter if every single successful trade only brings in a little bit, as long as added together, they bring in more than you lose.  That and money management, so you don't lose your shirt on those bad trades.  To me, that is what would make a good system.
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