Forex Trading Systems - Simple & Free

By: Monica Hendrix

It's a fact that forex trading systems that are simple will work far better than complicated ones and here, you will find a great FREE one you can use...

Why do simple systems work best?

The answer is they are more robust and have fewer elements to break than complicated ones. In forex trading many people build complicated systems and there very clever but you don't get paid for being clever in forex trading - you get paid for being right with your trading signal and that's it.

Today, we see huge amounts of forex trading systems for sale and most are junk.

They have very clever rules that have been bent to fit past data and they normally come with this disclaimer - if you see it your chances of winning with the system are low.

"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".

The reason is obvious why most trading systems fail they have been made knowing the past data and you can always get an equation to work but that's not the same as real time trading, because no two pieces of data history ever replicate themselves EXACTLY Longer term.

They are bent to fit the data or curve fitted and it's obvious why this is a great way to fail in forex trading. In forex trading the simpler the system the less it can be curve fitted and here we are going to look at a great one which is free.

So here we will give you a simple system which works - it can't be curve fitted as its only one rule - here it is liquidate short positions and go long when a price exceeds the highs of the previous 4 calendar weeks. Liquidate long positions and go short when a price falls below the lows of the previous 4 calendar weeks.

That's it - Simple? Yes but don't think it doesn't work it does and will get you in every big trend.

It was devised by Richard Donchian the grandfather of modern trend following and many of the worlds top traders have used including legends such as Richard Dennis.

It will suffer drawdown when the markets don't trend but all you do here is exit on a shorter time frame. For instance on one or two weeks and go flat until the next 4 week signal.

If you don't think it works just run a back test and you will see it does - its simple can't be curve fitted and is the perfect illustration of simple systems working best in currency trading. Its FREE it's robust and you can customize it - try it for yourself and see.

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