To learn how to trade profitably, you need to learn and master several trading systems. The key to trading is becoming a master of some trading strategies, not a doer of them all.
The trading system is important because it provides a structure, a set of rules, and a plan to follow. In this article, we discuss the different types of trading strategies available in the market and show you how to determine which is the best trading system.
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Index-based trading system
Indicator-based strategies that are approached with extreme caution are usually designed by someone who has noticed that this setup is working now. The problem is that it is working at the moment and very little analysis has been done to understand the longevity of this trading system.
The biggest problem with indicator-based trading systems is that they use indicators to generate trading signals rather than pure price action. When this indicator slows down, it tends to give worse and slower signals than net price action, which is the latest on the chart.
However, many amateur traders find this trading strategy too appealing as this trading system often looks interesting and ‘sexy’ on the charts.
A trading system that actually works
Price action trading strategy
Now we are happy to inform you that the best trading system you have been waiting for is price action. Price action trading is reading raw price action on a chart. Price is the most up-to-date information on the chart, so as you read the chart, it will be updated. As a trading system, price action is an extremely simple, effective and functional strategy, as it works on both trending markets and counter-trending ranges. Learning price behavior can simplify trading and dramatically improve results. With price action, traders have the advantage of being able to trade on any market on any timeframe because the price action setup is valid in all market conditions.
Learn the Price Action Trading System:
Install the pin bar
The pin bar price action trading strategy is a reversal system. It is designed to trade market highs and lows and can also be used to sustain a trend by buying dips in an uptrend and selling highs in a downtrend.
The inside bar can be used very effectively for online trading. Trend continuation strategy, mainly used when trading strongly trending markets.
Engle Ping Bar Settings
A tight bar is good for trend reversals. They are very rare but very powerful price action reversal signals. It can be used to trade a trend, but is usually found at the end of a trend reversal.
Don’t get overwhelmed by just a few price action trading strategies. Trade these settings in a number of different currency pairs. Build your confidence. Get familiar with defining settings and really understand how to enter trades step by step. Start with one price action trading system and only add another when you are completely comfortable.
To be fair, you can’t go wrong as long as you stick to things like price action trading or old fashioned technical analysis. Get informed about different indicator systems on the forum and get trading training from experienced traders and companies that provide real-time trading results.
One of the biggest problems inexperienced traders create is switching and switching between different trading strategies. Choose a trading system and strategy that suits your personality. It may take a few tries, but when you find something you like and can trade consistently, go ahead.