Beware of Forex Trading Systems

By: Kelly Price

Forex trading systems are more popular than ever but the vast majority wont help you make money on the contrary they will wipe you out and the reason is curve fitted data and performance. Let's look at this in more detail.

You have seen the track records of unbelievable stellar gains that are presented with the systems but the problem is these track records are not real there fantasy. Check the risk warning and you will see the words "simulated and in hindsight" printed.

Fantasy and Reality

This simply means, the vendor has tested the system backwards on a portion of data. The track record is created with knowing what happened and anyone can make money doing this.

What generally happens is the vendor tests some rules and parameters for the system and they don't work. So if you at first don't succeed try again and this is what they do. They keep bending the rules of the system changing them until they produce a positive result.

This method of testing is of course severely flawed as no two weeks of data are going to repeat themselves exactly again and when it comes to trading the system in real time, the rules cannot be bent.

Curve Fitting and the Destruction of Equity

So what you have is a trading system that has been tested backwards which of course has no chance of making money going forwards and to think that this method will work is naÃ?ve to say the least. Mind you, a lot of vendors don't really care if it works or not, they simply want to sell a system!

You have to also think if the vendor is confident in the system ( check out some of the copy you see) why he doesn't trade it? It hardly inspires confidence when the vendor won't put his money where his mouth is!

Why Does Anyone Work?

Of course of the trading systems worked no one would bother working full time. They would pack their jobs in and sit in the sun, while the forex robot earned them an income for life ..Not bad for a few hundred dollars, getting an income of a $100.000 per year. Alas, this is not reality, it's a world of fantasy and many forex traders who are perfectly sensible in real life, believe this nonsense - that they will get rich, without lifting a finger.

Be a Realist and Enjoy Currency Trading Success

The world of forex robots is one which you should avoid, they don't work and have never even been traded, it's a mugs game.

Focus on getting yourself the right forex education, learn the right knowledge and build your own forex trading system, it's much simpler than many people think and if you pay your dues and work smart you can enjoy currency success.

Don't be a dreamer understand in life you need to work and you do in forex trading as well but for the effort you put in the rewards can be immense.

Foreign Exchange
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 

» More on Foreign Exchange
 



Share this article :
Click to see more related articles