The most important step in a successful FOREX trading system is ANALYSIS, ANALYSIS, AND ANALYSIS. But after you make a great analysis, you know where price should go and when....what happens when price comes to your HITZONE? Thats where the next step in a successful system kicks in.
ENTRY TRIGGERS- one or more of the following: candlestick patterns, trendline breaks/touches, indications, fibo retracements/extensions, etc the signal a trader to place an open position.
In our system, we have 8 entry triggers, each with their individual stoploss and target areas...as each entry is unique. These are used on several timeframses, from Daily down to 15min charts. Also the timeframe adjusts the Entry/Stop/Target for each TRIGGER. It sounds complicated, but its not. Several of my traders only use 1 or 2 triggers, exclusively.
Now you've done a great analysis, gone to a trading timeframe and found a trigger, now you.............WAIT!!!!! We dont place trade positions without calculating our risk based on our account size and the probability of the trade. FIRST, Our system classifies trade setups according to the probability...ex. P1 is our highest rated trade setup. The probability corresponds to our Money Management system level of risk which is from .25% to as much as 5% risk. THEN, after we know how much we are risking, we can decide how to place this trade....1 full position, 2 x 50% positions, or 3 positions- a 1:1, a 2:1, and a RIDER...this is my favorite way.
And the complete system is woven together with TRADING PSYCHOLOGY that helps traders know what is happening in the market and in themselves.