In this episode of Truth About FX, Walter digs into trading systems and how important it is to know your personality first and cognitive biases before you go “systems shopping”, especially when you’re just starting out. Should you stick to one system or experiment on different ones? Hugh opens another perspective in scalping… And when do you know you need to try something else?

Walter also shares David Franklin’s techniques and how his setups helped him build his core system.

Download (Duration: 06:03 / 6.94 MB)

In This Episode:

00:34 – just one

02:18 – does not fit

04:00 – adjust it

05:15 – eye-popping

Tweetables:

Ride that trend [Click To Tweet].

Choose your broker wisely  [Click To Tweet].

Be aware of your emotions [Click To Tweet].

Announcer: Sometimes, forex trading is a wild and wooly place to be. That’s why Hugh is here, to post your questions to Walter, the naked forex guy. Hugh’s got questions and Walter’s got the answers. Here at the Truth About FX Podcast.

Hugh: Hi, Walter. When I first learn to trade, should I stick to just one system or should I find  multiple system at the same time?

Walter: I’m a big fan of trying to just get one thing down. You can always add more systems later but here’s the problem, if you’re trying to trade five systems at once or even three. Let’s say, you’ve got three systems and you really like them and you like to trade them.

The problem with that is that if you’re beginning as a trader, you’re just starting out, you’re less likely to stick with all of them. You’re probably going to rotate them in and out and you’re probably going to get frustrated with one or two of them. You’ll never really going to be an expert.

So, my approach is, decide what makes sense to you. Go with the best system you can come up with. Become an expert at that and then later on once you’re really bored with that system you can have more. That’s what I would say. I would just do that.

Try and work really hard at getting good at that and you can always add more markets. So let’s say, you’re trading a system on the EUR/USD and it goes really well. Well then, try and add the Pound and the Swissie and the Aussie. Add a bunch of other currency pairs on there and see if you can multiply your opportunities that way.

And then later on after you’ve been trading that system for two or three years, then maybe it’s time to look at adding a new one. In the background, you can still be testing your other systems, your potential systems of the future to add to your portfolio.

But really in the beginning, I think, I strongly believe, you should to  start to really kind of hone in for one thing. Otherwise, it’s just too easy to throw things away because the systems are too cheap.

But, if you’ll invest a lot in a system, it’s going to be more difficult for you to throw it away. So I would definitely try and stick to one system then slowly add more markets and then from there, you can add more systems. That’s what I would do.  

Hugh: I see, that makes a lot of sense. What happens, if let’s say that somebody finds a system they thi...