Forex Trading Systems - Simple Tips For Choosing The Best Ones
- Date: 2007-08-08 - Word Count: 598
Share This!
There are plenty of forex trading systems to choose from - the problem is over 95% will lose you money. The good news is: If you use the following simple tips, you will be able to find the ones that are likely to make you big consistent profits.
Here are your tips for choosing your trading system:
1. Look For a Real Time Track Record
This would seem obvious, but most forex traders don't look for the proof before buying and wonder why they lose!
Every system sold on the net comes with claims but most of these are made with no substantiation at all, so ignore the:
"90% success rate", "scalp 20 pips a day", or "earn a regular income"
Look for the proof.
Many vendors try and dupe investors, by giving a hypothetical track record but if you look at the disclaimer - this is a track record done in hindsight, knowing the closing prices!
Well, if I knew tomorrow's prices today, I Would be rich!
Unfortunately we don't have that luxury of knowing prices in advance when trading in the real world.
The first rule is - no real time track record don't buy it.
2. Check the logic
Make sure you understand why the system is likely to make money and you have confidence in it.
You must understand a currency trading system and have confidence in it, to follow it through inevitable periods of drawdown.
Avoid any day trading forex systems. They don't work - this is linked to point 1 above if you have checked that you will know they don't! and also any Black box
Systems where the method is not revealed.
If you don't have the confidence to follow a system with discipline you have no system!
3. Peak to Valley Drawdown
Always look at the worst peak to valley drawdown and time to recovery.
You need to assume that you are joining the system on the worst possible day.
Make sure you are comfortable with these short term down swings - All systems have drawdowns and they can last for months so it must fit your risk tolerance.
Always assume your worst drawdown is ahead of you.
4. Subjectivity Or Objectivity
Some forex trading systems require you to make subjective judgements - avoid these. If you are trading a system you want it to do the work and you follow it.
5. How Much Time Does It Take?
Any currency trading system should only take 30 minutes or less a day if its objective - subjective systems will take longer so make sure you have the time to run the system.
6. Know Your Vendor
Find out a bit about the vendor who has developed the forex trading system and of course their track record. Remember - if they have not traded it and made money why should you risk yours?
If they have a track record - see how keen they are to answer questions and what support is provided.
Go with your gut feeling - most reputable vendors will answer questions, give support and reveal their history - simply avoid those that don't.
Finally
To trade a forex trading system and have a chance of success you should know the logic, have confidence in it and have seen some evidence that it works in real time.
Be prepared to take at least the worst drawdown the system has had in the past cheerfully and stick with the system.
Achieving Long Term Success
Trading any forex trading system is long term and the above points will help you choose the best, stick with the system through bad periods and lead you to long term currency trading success.
Here are your tips for choosing your trading system:
1. Look For a Real Time Track Record
This would seem obvious, but most forex traders don't look for the proof before buying and wonder why they lose!
Every system sold on the net comes with claims but most of these are made with no substantiation at all, so ignore the:
"90% success rate", "scalp 20 pips a day", or "earn a regular income"
Look for the proof.
Many vendors try and dupe investors, by giving a hypothetical track record but if you look at the disclaimer - this is a track record done in hindsight, knowing the closing prices!
Well, if I knew tomorrow's prices today, I Would be rich!
Unfortunately we don't have that luxury of knowing prices in advance when trading in the real world.
The first rule is - no real time track record don't buy it.
2. Check the logic
Make sure you understand why the system is likely to make money and you have confidence in it.
You must understand a currency trading system and have confidence in it, to follow it through inevitable periods of drawdown.
Avoid any day trading forex systems. They don't work - this is linked to point 1 above if you have checked that you will know they don't! and also any Black box
Systems where the method is not revealed.
If you don't have the confidence to follow a system with discipline you have no system!
3. Peak to Valley Drawdown
Always look at the worst peak to valley drawdown and time to recovery.
You need to assume that you are joining the system on the worst possible day.
Make sure you are comfortable with these short term down swings - All systems have drawdowns and they can last for months so it must fit your risk tolerance.
Always assume your worst drawdown is ahead of you.
4. Subjectivity Or Objectivity
Some forex trading systems require you to make subjective judgements - avoid these. If you are trading a system you want it to do the work and you follow it.
5. How Much Time Does It Take?
Any currency trading system should only take 30 minutes or less a day if its objective - subjective systems will take longer so make sure you have the time to run the system.
6. Know Your Vendor
Find out a bit about the vendor who has developed the forex trading system and of course their track record. Remember - if they have not traded it and made money why should you risk yours?
If they have a track record - see how keen they are to answer questions and what support is provided.
Go with your gut feeling - most reputable vendors will answer questions, give support and reveal their history - simply avoid those that don't.
Finally
To trade a forex trading system and have a chance of success you should know the logic, have confidence in it and have seen some evidence that it works in real time.
Be prepared to take at least the worst drawdown the system has had in the past cheerfully and stick with the system.
Achieving Long Term Success
Trading any forex trading system is long term and the above points will help you choose the best, stick with the system through bad periods and lead you to long term currency trading success.
Related Tags: currency trading, forex trading, forex trading system, currency trading system, forex trading signal
NEW! 5 X Critical Trader PDF's & Much More Claim your FREE PDF's and demo account and learn Forex Trading and also get: Breaking financial news, tight pip spreads, guaranteed stops $100.00 minimum investment and 400:1 leverage at www.freeforexguidesonline.com Your Article Search Directory : Find in Articles
Recent articles in this category:
- Internet Based Forex Buying And Selling Class
By selecting to enrol in an online forex trading class, you are placing down a flag that you are tak - Fx Instruction Classes
Getting your self efficiently into the forex trading market, without taking undue dangers, can appea - Automatic Fx Trading
Intelligent Forex trading is performed by means of custom software applications that allow for non-s - Fibonacci Technical Analysis Overview
There is a unique ratio that could be used to describe the dimensions of just about everything from - Can A Forex Broker Help You Change Your Fortune?
Forex market is a volatile market and you should expect loses along with the profits. This very natu - Is It Important To Know About Forex Before Finding Forex Broker?
If you are planning to invest your money in the forex market, then you need to understand the rules - Managed Fx - Expert Managed Forex Service Will Make Easy Profits For You
Managed FX. Know what you need to easily start making profit in your forex trading account todayDo y - Fap Turbo Review - Facts About The Fap Turbo Expert Adviser!
FAP Turbo, despite being one of the older automated Forex trading systems, has managed to remain the - Forex Autopilot System - The Best Way To Use This Forex Software!
The Forex Autopilot System is an automated Forex trading program which will allow you to trade in th - Is Forex Trading Really That Risky?
You have most likely heard or maybe even experienced the risks involved in forex trading. It is not
Most viewed articles in this category:
- The Shocking Truth About the Forex Trading Industry!
You won't have to look far on the internet to find an endless barrage of web sites promoting the gla - Forex Trading - Money Management Secret (part 2)
Adjusting your trade size on a fixed percentage isn't a good idea. That we established in part 1. No - Trading System Possibilities
So many people continue to discuss the use of common technical indicators in trading systems, withou - A Beginner's Guide to Currency Trading
I'm sure that you must have heard of currency trading. But do you really understand what it is all a - Learn Forex Trading Online - An Introduction to Fundamental Analysis
It is often said that information is the key to successful Forex trading but, while accurate and up- - Forex Trading is NOT Just for the Pros
I had a discussion recently with one of my newsletter subscribers. He brought up the topic of forex - How Indicators and Patterns Point the Way to Forex Profits
If you have done even beginning research into trading, technical indicators and charting will become - Forex Trading from Home
Forex is one area of work at home opportunities that seems to be growing a great deal. People essen - Forex Advisory Services
Forex advisory services provide personalized consulting, currency forecasts and advice for corporati - Forex Currency Trading Systems
The forex currency trading system is the system, which lets the forex traders buy one currency and s