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Forex Trading Systems: Mechanical vs. Discretionary Systems

There are two main types of Forex trading systems, mechanical or automated systems and estimated systems. Forex signals that come from automated systems rely mainly on technical analysis that is applied in a systematic way. On the other hand, discretionary systems use experience and intuition to judge entry and exit points. But which one gives the best results? Or more importantly, which one suits your trading style? The answers to these questions will be answered in this article.

We will first analyze The Bitcoin Code Review pros and cons of the approach used by the two trading systems.

Mechanical systems

Advantages

The quality of the system can be completed and tested historically with all efficiency.

It has very strict rules. Either there is trade or not.

Automated traders are less susceptible to the emotions of discretionary traders.

Disadvantages

Most traders do the back test for mechanical trading systems incorrectly. To give accurate results, historical data must be obtained.

The Forex market is constantly changing. The Forex market (and all other markets) has a random component so the market conditions that may seem similar are in fact quite different.

The system, which worked successfully last year, will not necessarily mean that it could have been successful over the past year.

Estimated systems

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Advantages

The discretionary systems are easily adaptable to changing market conditions.

Trading decisions are based on experience. Traders learn how to identify trading signals that are more likely to succeed.

Disadvantages

It can not be done or completed because every decision is made based on a particular idea.

It takes time to develop the expertise needed to trade successfully and track trading signals in an organized manner. In the early stages, this type is dangerous

Now which one is the best approach for forex traders? The answer is the one that best suits your personality. For example, if you are a trader who finds it difficult to follow trade signals, it is best to use the automated system as your personal judgment will not play a big role in this system. All you have to do is take the trading recommendations produced by your trading system. If the psychological barriers will affect the trader such as (fear, greed, anger and so on) in a way that will lead you to undesirable scenarios, it is better to rely on automated trading systems because all you will need is to follow what the system will tell you by trading, either by buying or selling or closing Trading Center. You will not need to make any decisions.

On the other hand, if you are a disciplined trader, it may be better to use the discretionary system because the discretionary systems adapt to market conditions and thus be able to change trading conditions in parallel with market changes. For example, you might have a goal of earning 60 points in a shopping center. But the market came to start in the direction of a strong upward then you can raise the ceiling of profit, for example, to 100 points.

Does this mean that the estimated trading system is not governed by any rules? Of course this is not true. Trading systems mean that once the trader finds his or her settings, he decides what to do. But each trader still needs certain rules to follow such as the size of the trading order and the conditions that must be available before thinking about entering the market and so on.

I am a valued trader. The main reason for my choice of discretionary trading systems is that my trade depends on price action. As you know, of course, price behavior is similar to what it used to be in the past but it is never identical, so the output of each trade remains unknown. However, I have strict rules in my trading system where certain conditions must be available before I even think about entering the market. This keeps me away from trouble as much as possible. Once I find my numbers in line with the rules I set, I watch the price behavior closely and finally decide whether or not there is a good chance.

Whatever approach you prefer, be it a mechanical or discretionary trader, there are some important points to keep in mind:

1. You should make sure that the trading system you use will suit your personality, otherwise you will find yourself guessing away from your system.

2. You will also need some rules and the most important to follow with all discipline.

3. Take your time to build an optimal trading system for you. It is not easy and requires a lot of time and effort but ultimately if done correctly it will give you continuous profitability results.

4. Before working on a real account, it is best to try The Bitcoin Code Review system on a demo account or even on a mini account (I personally will go to the second option because psychological barriers will be present).

5 EMAs Forex System — Exponential Moving Averages at Full Potential

Among the important concepts that a new forex trader should be familiar with is the muffin line or the moving average meaning that he has to be aware of how he calculates and how he is used as a trading indicator.

The moving average is defined as one of the technical indicators that shows the average value of a particular currency pair over a predetermined period of time. This means, for example, that the average price can be measured within a period of 20 or 50 days or even 10 and 50 minutes depending on the time frame you use during your trade.

As an intermediate quantity, the muffin line is seen as a mirror of current market activity and as an indicator of the main trend that governs market movements.

This homogenous effect of the muffin lines is very useful as the trader helps to eliminate the so-called “noise” caused by the fluctuation of the currency pair that trades so that it can accurately focus on the main direction of the trend.

The basic idea of ​​how to identify the trends of the market, whether ascending or descending through the use of muffing lines in the conduct of your analysis is done by choosing two lines of muffing to be different in the time period of each of them on the graph. It is necessary to have one of the muffing lines calculated for a different time period than the period on which the other muffing is calculated; let us say for example that the first muffing line will be calculated on a 15-day time basis while the other muffing will be calculated on a 50-day basis. Most of the trading platforms available by many brokers will allow you to execute this and many more.

Recently, a new forex trading system called the “EMAs 5 Forex Trading System” was launched. This system will allow you to define entry and exit points with incredible accuracy. He even claims his ability to convert $ 1,000 to $ 1 million in just 24 months. It may be a bit exaggerated but the motion plan and the use of muffin lines usually give accurate and wonderful results.

Depending on the exit strategy selected, the trading system achieves a monthly return of between 30 and 55%. And therefore more than enough to achieve a profitable trade in the Forex market through the use of trading system 5 EMAs.

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