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Why you need to develop your own forex trading system
There are many forex trading systems and trading strategies out there. There are many free ones printed in forex trading articles, journals, books and on trading-related websites. You can buy them as software or you can subscribe to them periodically.
Novice traders say they do not have the time, the aptitude, the talent nor the brains to work out how to trade properly. They would rather purchase a program or subscribe to a forex trading system for hundreds - or in some cases - thousands of dollars. They say they do not have to do anything except be told what to buy, when to buy and how much of it you need to buy. Some ask me if this strategy or approach is advisable for trading the forex markets. To answer this question, I am then forced to consider the advantages and disadvantages of using such an approach to trading.
There are reasons why a trader would use a forex trading system or forex trading strategy that someone else developed and tested:
1. It is easy. A novice trader does not need to study how the forex market works and how he interacts with that market. He does not need to educate himself: he does not need to bother with books and seminars. He does not need to test the trading system, since the seller has already done that for him and reported promising hypothetical or actual results.
2. A novice trader hopes to get a forex trading system at a �bargain� price... sometimes even for free.
Hazards of trading a forex system or strategy developed and tested by someone else are the following:
1. Faulty Trading Systems
There are many faulty forex systems out there. They may be faulty because their assumptions and their mechanisms may no longer be true, accurate or valid. As a novice trader, how can you distinguish between the good systems and the bad systems if you don�t know how trading systems are built?
2. Discipline and confidence
All systems have drawdown periods. Some good forex trading systems may not make money for six months or an entire year. Even if it was a good system, can you continue to follow it even if it gives you a loss after a loss after a loss? How can you follow it if you do not have confidence in it? How can you be confident if you do not know the ins and outs of the system and if you have not tested it yourself?
I do not believe that people would blindly follow a system even if they were told that it would bring them riches. I can give someone a forex trading system, I can supply him with exceptional hypothetical or actual results and still, he would not be able to follow it.
I remember giving my dad a fully-mechanical forex trading system I developed. I told him a few simple rules and I told him not to question them. All he had to do was to follow them. We both traded it for two months, I grew my small account by roughly 50% (it happened to be a good two months), but he was losing. He wondered why. I asked to see his trading records. When I looked at his trading records, I found that he kept disobeying the rules. When I asked him why he disobeyed them, he wanted to improve the results after it had a couple of losing trades. He was trying to improve the results. According to him, the system asked him to do what he thought was not right during certain market conditions, so he did not follow it.
To overcome the hazards above, I see no way except for a trader to learn how to develop his own trading system. This is the only way a trader can know if a particular trading system or strategy is good or not.
Once a trader learns how to develop forex trading systems and strategies, he can then be better equipped to test them as well. By this point he might even find that he is better off using the system he created, because it becomes increasingly difficult to find another system more suited to his profit objectives while operating within his risk tolerance levels. It is likely that once he develops this level of competence, he will simply acquire other systems only to dissect them, grab the parts he likes and add them to his own system. To me, the irony is that for a trader to know which system to purchase, he must first learn how to create a system. And after knowing how to create a trading system, he will no longer have the need to buy one.
In conclusion then, I would have to say that if you are not inclined to learn how to develop your own trading methodology, then perhaps you should consider giving your money for someone else to invest. Give it to someone who is trading a system that he developed and tested himself because he is more likely to have the confidence and courage to follow his own set of rules.
From http://www.forex-articles.net
Thoughts On Forex
foreign exchange rate
I guess if you are a daytrader, 30 minute and 15 minute candle charts and line charts in combination with MACD and MA could be more useful than hourly charts or even daily charts. Especially watch out for the down-sign and up-sign with long tails in candle charts and confirmation of the change of short-term trend in line charts breaking accumulation area in these charts. If you are a nimble trader, even a candle-sign is enough to start moving in with stops above or below the long tail end. For dollar/yen trade, read swiss/yen, pound/yen and euro/yen together to confirm the top or bottom. For Eurodollar or dollar/swiss trade, read pound/swiss and euro/pound together to confirm the same. If you are a daytrader, what matters is the flow of that particular day, not the bull or bear bias, so, 30 Min and 15 Min Candle Charts and Line charts are not bad tools to follow these flows. Good trades.
online forex trading
A Forex trading system is a method of trading that uses objective entry and exit criteria based on parameters that have been validated by historical testing on quantifiable data. Although there is no hard and fast rule for design a Forex trading system, different experts have different opinions; however, the essence remains the same. In general, the Forex trading system provides the discipline to overcome the fear and greed that in many cases paralyzes a trader, and prevents him or her from making timely decisions. Each order placed is governed by a pre-determined set of rules that does not deviate based on anything other than market action.
forex signals
Increasingly, investors are turning to forex trading brokers to get in on some foreign currency trading. Unfortunately, not only is this branch of financial trading the one with the biggest profits and risks, but it is also most fraught with scams and shysters.
Forex News From Around The World
Euro is holding at support
Wed, 18 Oct 2006 06:53:00 GMT
Daily Currency report for Wednesday October 18 2006
This is only a guide.
Forex Day Trading
Understanding Forex
The First Commercially Available Stock Trading "Robot" Which Earns $346.77 Per Week
Why you need to develop your own forex trading system
There are many forex trading systems and trading strategies out there. There are many free ones printed in forex trading articles, journals, books and on trading-related websites. You can buy them as software or you can subscribe to them periodically.
Novice traders say they do not have the time, the aptitude, the talent nor the brains to work out how to trade properly. They would rather purchase a program or subscribe to a forex trading system for hundreds - or in some cases - thousands of dollars. They say they do not have to do anything except be told what to buy, when to buy and how much of it you need to buy. Some ask me if this strategy or approach is advisable for trading the forex markets. To answer this question, I am then forced to consider the advantages and disadvantages of using such an approach to trading.
There are reasons why a trader would use a forex trading system or forex trading strategy that someone else developed and tested:
1. It is easy. A novice trader does not need to study how the forex market works and how he interacts with that market. He does not need to educate himself: he does not need to bother with books and seminars. He does not need to test the trading system, since the seller has already done that for him and reported promising hypothetical or actual results.
2. A novice trader hopes to get a forex trading system at a �bargain� price... sometimes even for free.
Hazards of trading a forex system or strategy developed and tested by someone else are the following:
1. Faulty Trading Systems
There are many faulty forex systems out there. They may be faulty because their assumptions and their mechanisms may no longer be true, accurate or valid. As a novice trader, how can you distinguish between the good systems and the bad systems if you don�t know how trading systems are built?
2. Discipline and confidence
All systems have drawdown periods. Some good forex trading systems may not make money for six months or an entire year. Even if it was a good system, can you continue to follow it even if it gives you a loss after a loss after a loss? How can you follow it if you do not have confidence in it? How can you be confident if you do not know the ins and outs of the system and if you have not tested it yourself?
I do not believe that people would blindly follow a system even if they were told that it would bring them riches. I can give someone a forex trading system, I can supply him with exceptional hypothetical or actual results and still, he would not be able to follow it.
I remember giving my dad a fully-mechanical forex trading system I developed. I told him a few simple rules and I told him not to question them. All he had to do was to follow them. We both traded it for two months, I grew my small account by roughly 50% (it happened to be a good two months), but he was losing. He wondered why. I asked to see his trading records. When I looked at his trading records, I found that he kept disobeying the rules. When I asked him why he disobeyed them, he wanted to improve the results after it had a couple of losing trades. He was trying to improve the results. According to him, the system asked him to do what he thought was not right during certain market conditions, so he did not follow it.
To overcome the hazards above, I see no way except for a trader to learn how to develop his own trading system. This is the only way a trader can know if a particular trading system or strategy is good or not.
Once a trader learns how to develop forex trading systems and strategies, he can then be better equipped to test them as well. By this point he might even find that he is better off using the system he created, because it becomes increasingly difficult to find another system more suited to his profit objectives while operating within his risk tolerance levels. It is likely that once he develops this level of competence, he will simply acquire other systems only to dissect them, grab the parts he likes and add them to his own system. To me, the irony is that for a trader to know which system to purchase, he must first learn how to create a system. And after knowing how to create a trading system, he will no longer have the need to buy one.
In conclusion then, I would have to say that if you are not inclined to learn how to develop your own trading methodology, then perhaps you should consider giving your money for someone else to invest. Give it to someone who is trading a system that he developed and tested himself because he is more likely to have the confidence and courage to follow his own set of rules.
From http://www.forex-articles.net
Thoughts On Forex
foreign exchange rate
I guess if you are a daytrader, 30 minute and 15 minute candle charts and line charts in combination with MACD and MA could be more useful than hourly charts or even daily charts. Especially watch out for the down-sign and up-sign with long tails in candle charts and confirmation of the change of short-term trend in line charts breaking accumulation area in these charts. If you are a nimble trader, even a candle-sign is enough to start moving in with stops above or below the long tail end. For dollar/yen trade, read swiss/yen, pound/yen and euro/yen together to confirm the top or bottom. For Eurodollar or dollar/swiss trade, read pound/swiss and euro/pound together to confirm the same. If you are a daytrader, what matters is the flow of that particular day, not the bull or bear bias, so, 30 Min and 15 Min Candle Charts and Line charts are not bad tools to follow these flows. Good trades.
online forex trading
A Forex trading system is a method of trading that uses objective entry and exit criteria based on parameters that have been validated by historical testing on quantifiable data. Although there is no hard and fast rule for design a Forex trading system, different experts have different opinions; however, the essence remains the same. In general, the Forex trading system provides the discipline to overcome the fear and greed that in many cases paralyzes a trader, and prevents him or her from making timely decisions. Each order placed is governed by a pre-determined set of rules that does not deviate based on anything other than market action.
forex signals
Increasingly, investors are turning to forex trading brokers to get in on some foreign currency trading. Unfortunately, not only is this branch of financial trading the one with the biggest profits and risks, but it is also most fraught with scams and shysters.
Forex News From Around The World
Euro is holding at support
Wed, 18 Oct 2006 06:53:00 GMT
Daily Currency report for Wednesday October 18 2006
This is only a guide.
Forex Day Trading
Understanding Forex
Labels: How To Trade Forex
posted by Big Time Trader | 1:41 PM
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