Currency Trading Systems - Getting One for Big Profits

By: Kelly Price

The rise of online trading has seen a rise in the number of trading systems sold online and the first criteria you judge them on are their track records so you need to establish if it has been traded in real time and made money.

Look at the disclaimer to find out - most forex trading systems carry the disclaimer below read it 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".

The above is a standard CFTC disclaimer and you will see it frequently or a similar one on most forex trading systems sold.

If you have read it carefully, it means that a vendor can make up any track record they wish, in hindsight and simulate profits on a graph - this is not of course the same as trying to make money in real time in the market - not knowing the closing prices makes it far harder!

Many vendors are not traders, their marketing companies.

They simply try and appeal to the greed and naivety of the buyer with hyped copy and a track record that's simulated.

The best way to pick a good forex trading system is to get one that has been traded, made real dollars and is audited and supported by account statements from a forex broker.

Not all simulations are worthless and there are a few honest vendors trying to get started - but if you must use one, look for the following

-You need to know the logic the system is based on and see if it makes sense to you. You won't be able to follow it unless you have confidence in it.

-Avoid any track record that shows huge gains and very low drawdown, ( most systems that are good will drawdown by 25% or more for at least several months ) If it looks to good to be true - it is.

-Never be tempted by a day trading system - day trading simply does NOT work long term.

-Look at the history of the vendor and ask some questions until you are happy.

-Look for a guarantee of satisfaction or your money back.

When you have found one you like and understand the logic, you need to have confidence in it and trade it.

Make sure you know exactly how and why you're trading system works, so you have the confidence to execute your trading signals with discipline. If you don't have the discipline to apply your trading system, have no system!

This is why confidence is vital, before you start.

Look at how much money is needed to start trading and calculate the worst drawdown in the trading systems history and time to recovery, i.e you joined the system at the worst possible time.

Always assume your worst drawdown is ahead of you and be prepared to take it.

There are some good honest systems out there and it's up to you to find them and the above simple tips will help you.

Always remember there is no free lunch or easy money to be made in forex trading and you wouldn't expect there to be, with the rewards on offer.

If you find the right currency trading system which you understand and can apply with confidence, you can enjoy long term currency trading success, with minimal effort. Just make sure you do your homework first.

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