How To Be A Successful Trader - Rule 5

Today I will be sharing with you the 5th rule of successful financial trading. I hope that all readers have enjoyed all of my posts in the last few days, and everyday I try something new and different, so I hope you are all learning how to trade successfully.

Rule 5:  Always Follow The Trading System That You Are Using

This may sound like an easy rule to follow but in reality it is a lot harder. When trading, you must find a system that is successful and shows profitable returns. You should analyse the system, and you should stick to the system exactly when following it.

A successful trading system is one that has been back tested over a large period of time. I tend to say the minimum testing period for any trading system should be at least 10 years. For example, our own LS Trader system has been backtested over 26 years across numerous markets, so we know it works!

A good trading system will have rules that you should always follow and should allow for every scenario. You should always know exactly what to do, and when to do it. A good system should also be a long term system, so you should not be sitting glued to your computer screen 24 hours a day. That is day trading, and in my opinion, day trading does not work! With the trading system, you should have defined stop loss limits, and you should stick to them. This means when you enter a trade, you will know the exact amount you could lose on that trade should the worst happen.

Every trading system will have drawdowns and this is something that you have accept as a trader. Every successful trader accepts drawdowns, and a successful trader is one that can accept these losing periods as part of trading. You should always look at the past drawdowns of any system, and you should make sure that the levels are levels that you would feel comfortable accepting should it happen to you. If it is out of your comfort zone, then you should not use that trading system.

Overall it is imperative that you follow the exact trades generated by your chosen system. You should chose a system carefully and understand everything about it before using it with real money. Once you are satisified about your choice, you must stick to it, and follow it exactly. When the going gets tough, accept it as part of trading and just keep going. The losers are those who stop using that system, and accept the loss. When that system recovers, they will be the ones kicking themselves because they stopped following the system.

If you are looking for a great system, the one I recommend is my own system, LS Trader. To learn more you can visit our website at www.LSTrader.co.uk and go through the website carefully. There is a lot of information on the site, so take your time and digest that information before signing up.

Kind Regards

Robert Stewart