Currency Trading Systems - A Simple Free One For Huge Profits!

If you want to win with a currency trading system, you may think that the more complex your system, the more chance it has of making money. You would be dead wrong. Lets look at why simple is best and a great FREE System, you can use right now.

Consider this rather startling fact:

Today our PC's are more complex than the one that landed man on the moon, with far more processing power and software applications today are simply mind boggling in their complexity and power. Now does this help traders make money?

No!

25 or 50 years ago 95% of traders lost money and the same ratio lose today, so the application of technology hasn't helped and there is a reason for this:

Markets do NOT Move to a scientific theory, so you can't apply complexity to win.

In fact, complex systems are more likely to lose than simple ones, because they have too many elements to break and are not as robust.

Simple systems work best and will continue to outperform complex ones.

You hear a lot about systems being able to think for themselves and adapt to market behavior - absolute rubbish, there are far to many variables and markets don't move to science - it's an odds game.

The biggest laugh is - computers that are supposed to predict in advance.

Prediction is just another word for hoping or guessing - try it and the prediction will be as accurate as your horoscope.

The way to trade is to catch high odds trades and there is a great currency trading system that's free and can do this, its called Richard Donchian's 4 Week Rule.

Its simple - buy a 4 week high and reverse and sell a 4 week low - that's it.

Don't think it cant make money it does.

This system has been the basis of many a successful trading system over the years and it works great in trending markets. Run it across a currency and see, you will always be in on the big trends.

Its simple, robust and some of the best traders of all time, like Richard Dennis have taken it seriously and if its good enough for his forex trading strategy, its certainly good enough for yours.

Of course in non trending markets, it will take drawdown but you can simply adjust the exit rule (see our other articles for more details on this

I once bought a computer trading system that was programmed by an ex NASA engineer and sure it was clever - but wiped my equity out in six weeks!

I never made the same mistake again - complexity doesn't equal success in forex markets and there is no correlation between how complex a system is and how much money it will make you.

So, if you want to make money with a currency trading system - keep it simple and a good place to start is to look at Richard Donchian's 4 Week Rule.

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Forex Robots - Learn To Spot Curve Fitted Systems Or Lose

Many forex traders want to use forex robots and make automatic forex profits but if you want to follow a Forex trading system then you need to be able to spot curve fitting or you will lose...

So what is curve fitting?

Curve fitting is testing a system over back data and bending the rules of the system to fit the data. This is similar to shooting at a barn door with a blindfold on and then drawing a bulls-eye around everyone afterwards!

Most forex robots you see are curve fitted and a good clue is - if you see the disclaimer below with the track record read it very carefully!

"CFTC RULE 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown".

Check any Forex trading system you buy for the above and if you see it the track record is meaningless.

Anyone can make a profit in hindsight and bend the rules to fit the data in a back tested simulation - its easy.

The problem is vendors simply make up track records and curve fit them, knowing they will lose in real time (if they had confidence in them, they would of course trade them themselves and have a real one), these robots rely on clever marketing copy and the fact that most traders simply don't read the small print. These traders are either na've, greedy or both and pay for it in the market.

If you must want to trade an automated Forex trading system, make sure it has a real time track record - but beware - there few and far between and expensive. You don't get good performance for a few hundred dollars.

Even if you do find one, make sure you have confidence in how and why it works so you can follow it with discipline.

A Better Way To Trade?

Another way to trade is to simply make your own Forex trading system and this is much easier to do than many traders think. You can soon get a simple robust system together and be making some great FX Profits and we will cover this in the next article in this series.

In conclusion be very careful of forex robots that promise you huge gains with low risk, for a few hundred dollars - they don't work long term, are curve fitted and as you can see from this article, your clue to avoid them is in the disclaimer.

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