Forex Trading Systems - Before You Buy One...
by Harold Hsu
Although there is a plethora of scam trading systems circulating the internet, there are indeed a few good systems based on sound fundamentals that perform consistently well. However, even when people purchase such good trading systems, they sometimes still fail to produce consistent profits. Why?
One problem is because the buyers don't understand the operating logic behind these trading systems. They just don't know why they are buying or selling! They just want to know when to buy or sell, and don't care about the reasoning behind each buy or sell setup signal.
You see, when a trader doesn't understand the trading system he follows, he'll easily lose confidence in it the moment he starts suffering a few loses. That's when he'll begin to change the rules of the system, and so his trading discipline basically goes flying out the window. And I think I don't have to elaborate on what happens to traders with no trading discipline - Simply put: they lose money. They lose a lot of it.
Ideally, Forex traders should all develop their own trading systems. But I'm sure that not everyone will have the luxury of the time or effort required to develop a reliable trading system.
That's why when you choose to purchase a trading system, please make sure you understand every single aspect of it. Understand why the system tells you to buy (or sell), and why the system tells you to hold a position (or to exit).
Another important thing to understand, is the reasoning behind the largest position size you're allowed to hold per trade. In Forex trading, the size of your trade positions ties in very closely to your entire trading system.
Every good trading system considers the maximum allowable position size in relation to the overall trading strategy. Don't consider purchasing trading systems that don't include a relevant money management system... chances are that those are scams!
แสดงบทความที่มีป้ายกำกับ Forex Market Timing แสดงบทความทั้งหมด
แสดงบทความที่มีป้ายกำกับ Forex Market Timing แสดงบทความทั้งหมด
วันศุกร์ที่ 18 มกราคม พ.ศ. 2551
วันอังคารที่ 8 มกราคม พ.ศ. 2551
Forex Trading Systems - Want to win 90% of the time?
Forex Trading Systems - Want to win 90% of the time?
by Harold Hsu
Online, you'll often read about Forex trading advertisements that boast of more than 90% winning trades.
Sounds great doesn't it? Would you pay $100 for a trading system that may win 90 out of every 100 trades?
If you answered "Yes", you're in trouble!
Unfortunately, the truth is that a high winning percentage has little to do with being a profitable trader. In reality, it's easy to have 90% of winning trades and still lose money.
Don't believe me? Go ahead a search online search for the "turtle traders". If you're familiar with them, you'll know that they are very profitable traders with only a 20% winning trade percentage.
Allow me to explain...
Imagine you make 10 trades in a month, and 9 of these trades are profitable for $1 per winning trade. This means that you have a winning percentage of 90%, with $9 in profit.
And if you have only 1 losing trade out of 10 (i.e. 10% losing trades), but you lose $10 on that one losing trade. In total, you would have lost ($9 - $10) $1 among all your ten trades.
Can you now see why a high winning percentage doesn't mean that you'll be a successful trader? You see, it's not about how often you win, but how MUCH you win.
So don't fall for the marketing tricks
Many advertisers use high winning percentages as a sales tool to get you to buy the trading systems they are selling. They know that traders like to win all the time, and who doesn't like to win often? These advertisers try to appeal to everyone's desire to win, and unfortunately many people fall for their trap.
Conclusion
It's easy to have 90% winning trades and still be a losing trader. At the same time, you can have a low winning percentage, but be a very profitable trader. In reality, winning percentages have very little to do with a trader's success.
So don't fall into the advertisers' trap when you see their "high winning percentage" claims next time. When people use high winning percentages as a sales pitch, chances are that they know very little about what it truly takes to be a successful trader. Be careful!
by Harold Hsu
Online, you'll often read about Forex trading advertisements that boast of more than 90% winning trades.
Sounds great doesn't it? Would you pay $100 for a trading system that may win 90 out of every 100 trades?
If you answered "Yes", you're in trouble!
Unfortunately, the truth is that a high winning percentage has little to do with being a profitable trader. In reality, it's easy to have 90% of winning trades and still lose money.
Don't believe me? Go ahead a search online search for the "turtle traders". If you're familiar with them, you'll know that they are very profitable traders with only a 20% winning trade percentage.
Allow me to explain...
Imagine you make 10 trades in a month, and 9 of these trades are profitable for $1 per winning trade. This means that you have a winning percentage of 90%, with $9 in profit.
And if you have only 1 losing trade out of 10 (i.e. 10% losing trades), but you lose $10 on that one losing trade. In total, you would have lost ($9 - $10) $1 among all your ten trades.
Can you now see why a high winning percentage doesn't mean that you'll be a successful trader? You see, it's not about how often you win, but how MUCH you win.
So don't fall for the marketing tricks
Many advertisers use high winning percentages as a sales tool to get you to buy the trading systems they are selling. They know that traders like to win all the time, and who doesn't like to win often? These advertisers try to appeal to everyone's desire to win, and unfortunately many people fall for their trap.
Conclusion
It's easy to have 90% winning trades and still be a losing trader. At the same time, you can have a low winning percentage, but be a very profitable trader. In reality, winning percentages have very little to do with a trader's success.
So don't fall into the advertisers' trap when you see their "high winning percentage" claims next time. When people use high winning percentages as a sales pitch, chances are that they know very little about what it truly takes to be a successful trader. Be careful!
วันเสาร์ที่ 5 มกราคม พ.ศ. 2551
Forex Market Timing - You Don't Need to Be Accurate To Make Huge Gains
Forex Market Timing - You Don't Need to Be Accurate To Make Huge Gains
by kelly Price
If you want to win at trading currencies correct forex market timing is needed but if you try and be too precise you will lose. This may sound strange at first but if you look at how forex prices move it will become clearer.
1. When novice traders think of market timing they are dominated by two major thoughts:
Predicting market tops and bottoms
It's very tempting to do this as you want to be in at the best possible price with your forex trading strategy but you cannot predict in advance why?
Because if you then you are simply hoping and guessing a level will hold and that wont get you anywhere in life and certainly wont give you currency trading success. Let me give you an example:
A forex trader sees prices moving to a support level and buys just above it hoping it will hold - but instead the price carries on towards support, goes through the level and stops him out.
What he should have done is confirmed that the level was going to hold (we will go through how to do this in a minute) but first lets look at another commonly held belief related to the above.
2. Buy low sell high
You will have heard this is the way to make money in investing - but it's again relying on hoping and guessing which we know will not help us win and also means you will miss the major forex trends and not get in with your forex trading signal - Why?
It's a fact that most new trends (and the strongest) develop from new market highs o and you can check this on any forex chart. Traders who wait hoping to get into the market at a better price, simply see the trend disappear over the horizon and they don't make any profits from it.
The Solution
Is to base your forex trading strategy on confirming if level will hold or break with momentum oscillators. If you don't know what they are its time to learn.
We don't have time to cover them here - but they are covered in our other articles and will give you advance warning of changes in velocity of price.
If a price is dropping to support - wait for a turn to be confirmed by these indicators.
You will miss the exact turn but you can't see that in advance anyway, so there is no point in trying and if you trade with momentum on your side the odds are in your favour.
The same technique is used when a market breakout to new highs or lows - if momentum supports the move execute your trading signal and go with the break.
Trading the Odds
In both of the above examples you have not got in at the lowest or best price but what you have done is, got in at the lowest or best price with the odds on your side and traded the reality.
Perfection and perfect timing is a myth, no one can do it and the best way is to trade the reality when you use a forex trading system and that means confirming ALL moves are going your way before trading.
Keep in mind if you get just 50% of every major trend you would be very rich. If you want to learn currency exchange the right way you will realise perfection is impossible.
Forex trading is about making money not trying to be clever and it's about trading high odds moves and then means waiting for confirmation.
by kelly Price
If you want to win at trading currencies correct forex market timing is needed but if you try and be too precise you will lose. This may sound strange at first but if you look at how forex prices move it will become clearer.
1. When novice traders think of market timing they are dominated by two major thoughts:
Predicting market tops and bottoms
It's very tempting to do this as you want to be in at the best possible price with your forex trading strategy but you cannot predict in advance why?
Because if you then you are simply hoping and guessing a level will hold and that wont get you anywhere in life and certainly wont give you currency trading success. Let me give you an example:
A forex trader sees prices moving to a support level and buys just above it hoping it will hold - but instead the price carries on towards support, goes through the level and stops him out.
What he should have done is confirmed that the level was going to hold (we will go through how to do this in a minute) but first lets look at another commonly held belief related to the above.
2. Buy low sell high
You will have heard this is the way to make money in investing - but it's again relying on hoping and guessing which we know will not help us win and also means you will miss the major forex trends and not get in with your forex trading signal - Why?
It's a fact that most new trends (and the strongest) develop from new market highs o and you can check this on any forex chart. Traders who wait hoping to get into the market at a better price, simply see the trend disappear over the horizon and they don't make any profits from it.
The Solution
Is to base your forex trading strategy on confirming if level will hold or break with momentum oscillators. If you don't know what they are its time to learn.
We don't have time to cover them here - but they are covered in our other articles and will give you advance warning of changes in velocity of price.
If a price is dropping to support - wait for a turn to be confirmed by these indicators.
You will miss the exact turn but you can't see that in advance anyway, so there is no point in trying and if you trade with momentum on your side the odds are in your favour.
The same technique is used when a market breakout to new highs or lows - if momentum supports the move execute your trading signal and go with the break.
Trading the Odds
In both of the above examples you have not got in at the lowest or best price but what you have done is, got in at the lowest or best price with the odds on your side and traded the reality.
Perfection and perfect timing is a myth, no one can do it and the best way is to trade the reality when you use a forex trading system and that means confirming ALL moves are going your way before trading.
Keep in mind if you get just 50% of every major trend you would be very rich. If you want to learn currency exchange the right way you will realise perfection is impossible.
Forex trading is about making money not trying to be clever and it's about trading high odds moves and then means waiting for confirmation.
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