Hi all, I want to talk to you about the typical default settings on popular forex systems. Most systems that are available today including the the good ones, have huge stop losses and small take profits. It is my belief that most forex systems will not work good on just default settings. For example if you have a system that has a stop loss set at 120 and a take profit set at 26, even one stop loss can take months to recover. Is this really how you want to trade? Now just imagine if you are trading a few different currency pairs and they all hit hard stop losses relatively close together. Believe me this can and will happen at some point, it is the nature of the forex market.
My primary purpose of this post is to shed some light on how you are using your forex system to trade. Hopefully you will reassess your set files and adjust the stop losses to a setting you feel comfortable with. It is important to remember you will get multiple stop losses almost back to back at some point I cannot stress this fact enough, so keep this in mind.
To find a stop loss you are comfortable with you can backtest the strategy with different settings to find the one that allows you to sleep well at night. These backtest results will give you a taste of what to expect, but you will get different results trading live.
Hopefully this post will help you trade smarter, reduce your stress level and keep your drawdown low during live trading. Happy trading.
