A game is defined by its rules – Ludwig Wittgenstein

Resisting the temptation to go “well, duh…” at this piece of profoundity – let’s head straight for the final question: so do you need a forex system or not?

Make $12,345 a day
You could always go and pay to use someone else’s system – as we know, the internet is decorated with all kinds of wondrous claims for competing secret systems: How to Get Rich at Forex in 1 month, I made $12,345 in just 2 weeks trading…

They’re usually some fairly tired spiel about Fibonacci retracement dressed up as cosmic truth that only the inventor of the system knows and can be yours for $xxx. Some of these ’systems’ do ‘work’ – if they’re based somewhere near sound principles, you may show a profit – then all you’ve got to do is recoup the $xxx you paid in the first place.

Discipline
People talk a lot about discipline in forex trading – “being disciplined will see you through”, I’ve never been sure that’s quite the word or the sentiment – it’s being tough, it’s being honest, it’s a clear-headed evaluation of where you are, what you’re doing and where you’re going with it. But it’s not being robotic.

If you’re going to trade to a system, you have to stick to it while you try it out. If evaluation persuades you that the system is complete garbage, then yes, obviously stop – but if you stop after two losing trades, you haven’t demonstrated anything. Keep changing your own rules, and coming up with a completely new set of principles every Monday morning isn’t going ot work in the long-run.

A system = limits = limitations?
And if you are going to use a system, you are placing limits. This may be a good thing. If you feel that you are a little too impetuous, or easily persuaded by some signal, then having the structure of a system behind your trades may well be just the thing.

Equally, it may not be a good thing. Flair, especially coupled with experience, always has its place. Sometimes, a trader just gets sick of being locked into a system, even of their own making, and the whole business stops being fun (investment is supposed to be a serious business, but…).

Everybody has rules-of-thumb that stick with them. They’ve noticed something about a good trade, and they haven’t said “ah, that’s the secret to everything”, instead, they’ve said, “ah, that’s filed away for future reference, not infallible, but useful to know” …. This is what comes with experience, and only with experience.

Build on what’s already there
Modify someone else’s system and make it your own – if you come across something somebody has published and it seems to make sense – this can often be the way, finding a base to build on, tweaking it as you go, gaining experience and reinvesting this in your system – then you will have your own system…

Conclusion
This advice works universally, and there’s no reason to suggest it’s anything otherwise with forex trading – never stop learning. Get a demo account – get 5 demo accounts – and immerse yourself in charts and news. If you never stop learning, and never overreach yourself, you won’t go far wrong…