So you’re determined to create your own Forex trading system? Then congratulations, you are on the right track here. Primarily, you must determine and set the principal goals of your trading system. You can say that your goal is to become a billionaire soon. However fantastic that may sound, it’s not exactly the type of goal that will eventually make you a successful trader. Please take not that when you are developing your own system, you want to achieve two basic objectives. To identify trends as early as possible and to avoid whipsaws.
If you can guarantee the accomplishment of those two objectives using your own Forex trading system, then you can assure yourself that you will become successful! However, there is a slight difficulty when trying to achieve these goals. If you haven’t noticed, these goals tend to contradict each other. When your system has a sole purpose to catch trends early, it is highly possible that you get faked out many times. On the other hand, when your system has a sole purpose of avoiding whipsaws, then you are likely to be late on many trends and will probably miss out on a lot of good trade opportunities.
Always remember that your task in developing your own Forex trading system is to find a definite compromise between the two goals. Come up with a way to catch trends early while at the same time figure out ways that will help you identify the real signals from the fake ones.