Friday, July 25, 2014

Does a Perfect FOREX Trading System actually exists?

Almost all, Forex forums are full of newbies asking about the best trading system or strategy and how they can start earning lots of money from Forex, but they're usually brought back down to earth by more experienced forum members -- because there is no such thing as the perfect Forex trading system; unfortunately.

On these same forums you will often read about latest and greatest Forex systems or strategies, but almost all of these systems or trading robots eventually end up failing, despite initially looking profitable. It's the same story with many of the commercial or free systems available online. They all have very impressive track records and look like highly successful systems on their sales page, but when you come to buy them, you quickly discover that they aren't anywhere near as profitable as they claim to be. This is hardly surprising of course because if these systems were so profitable then they wouldn't want to sell them to the general public. Shouldn't the amateur and, or so called expert traders be aware of the fact that not only a few, talented or select people around the world are trying to build a perfect Automated/Algorithmic Trading System or Trading Robot, but 100s of 1000s of expert traders and programmers are geared to do so since the day general purpose computers were introduced to the public. Big-wigged organizations like as Google, Yahoo, Reuters, Microsoft, A&T, most of the banks, hedge-funds and other such money or funds management companies engaged fleets of experts or renowned programmers who I'm sure are working day and night to build an excellent trading system of their own, but the million dollar question is -- did they succeed till today?

Likewise, many a people, channels, magazines and, or companies all over world are selling tips for trading, but why? Do these really work for them? If yes, why don't they trade themselves using their tips and, or such a result oriented research, analysis and strategies?

Please don't buy and, or try, we are not endorsing these, but do explore the following sites:
On the other hand, I repeat -- why the hell anyone will sell such a predominating system, if it works well for him/her and is generating huge amounts of money by investing a very small capital?

Believe it or not, but the fact is that there exists no such thing as a perfect system, strategy and, or combinations of indicators. There, however, are lots of systems that are capable of making a profit in the long-run, but even the very best systems will go through low periods and incur some losses in the short-term -- means almost all indicators fail at one or other time-frame or period.

Unfortunately, there is no fast and easy way to learn trading. Pretend for a moment that you don’t know how to cook. You sign up for a cooking class that will consist of 15 sessions of three hours each, or 45 hours. By the end of that time, you will know how to do more than boil water, but you will not be qualified to solicit capital from investors and open a restaurant.

Forecasting foreign exchange rates is notoriously difficult. Economists don’t have a standard model of what determines exchange rates, and even the most brilliant and closely-reasoned forecast can run off the tracks as events unfold. But multinational corporations, FOREX traders and global fund managers must have forecasts in order to select foreign activity priorities and to protect against catastrophic loss.

The key to being successful is to develop a simple system or strategy where the odds are in your favor for every single trade you make. This can be achieved by combining certain technical indicators so that you only enter positions where all your chosen indicators point in the same direction and your system also helps you in filtering out fake signals, so you can be confident in entering into a long or short position.

You don't necessarily need to trade a system with a high success ratio either. You can make decent money from Forex trading just by developing a system with a 70-80% win ratio, for instance, if you have a solid stop-loss policy and let your winning positions run -- that is your system is also capable of risk and, or money management techniques and is dynamic enough to absorb market fluctuations and, or spikes before or during release of economical data.

It basically comes down to probabilities. If you have probability on your side for every trade you make then there's no reason why you shouldn't make money from Forex trading. You don't need to constantly be on the lookout for a latest and greatest trading system. It's very often the simple tried and tested systems or strategies that are the most profitable in the long run.

Hence, the best or perfect strategy or system is which is simple, works for you, works on all time-frames and or all instruments.

Do back-test your system on all time-frames using reliable historical data for the past 2-3 years and over live data for next 2-3 months using a DEMO account before you bet your real money.

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