Most traders would agree that there is one secret to success in foreign exchange trading. It is: being systematic.

This means always being consistent, following the system and applying the plan, no matter how the market looks and no matter how you feel.

The world of foreign exchange trading can be crazy at times and being consistent is our main chance of being successful. Maybe it’s even the only way to be successful.

Easy enough to say, but a little harder to do in practice, right?

In fact, it gets a lot easier if you have certain things in place before you ever start trading for real.

The first thing that you need is a good solid foreign exchange trading system that is showing profits in testing. This means back testing plus testing in a demo account.

For the back testing you can rely on somebody else’s results if you trust them, but the demo account testing you must do yourself. This is because there may be something that you are doing differently.

You also need to know how it feels to trade with this system before you go live.

At the same time as you are testing the system in demo, you can be drawing up your foreign exchange trading plan. Risk management is one of the most important factors here.

How much will you risk per trade? This can vary according to the system and the trader but it is usually something around 1% to 5%, never more than that.

If you go higher you will very likely lose the whole funds during one of the inevitable bad spells that all systems go through from time to time.

The plan also includes the level for a stop loss on each trade, the level of profit that you are aiming for, and of course the trading signal(s) that indicate when a trade should be opened.

It is important not to deviate from these once you have decided on the system.  Remember that profits depend on a system being applied consistently.

Before going live it is important to have complete faith in your system. If there are still any doubts in your mind about it, stay in demo. This is because foreign exchange traders who go live without being completely confident in a system tend to start tweaking or switching systems as soon as there are a couple of losses. It is very important not to do this.

If you jump from system to system any time there are losses, you will miss the moment when the market would have repaid you. You will probably switch to a system that has been doing well recently, only to find you have got in just when it is taking a downturn.

So never make decisions based on short term results. Do not act on impulse either. Have your plan written out in every detail and keep it with you when you are trading. This will reduce the number of mistakes made in moments of stress.

If you have trouble being systematic, you may want to consider using an automated forex trading system, otherwise known as a forex robot.

Once you have it set up right, a robot will be 100% consistent in applying a foreign exchange trading system.

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