FOREX trading systems are big business now as the internet allows anyone to use one and make big profits.
The question traders need answered is – what do they look for when they buy a FOREX trading system to locate the good FOREX systems from the losing majority.
This article will give clear, concise, tips for picking a FOREX trading for huge profits and how to construct your own one for FREE!
Right, lets get started and look at getting FOREX trading systems with the potential to make huge gains.
Choosing a system from a vendor
Many traders choose to buy a FOREX trading system ready made and ready to go. Just plug it in and huge profits come quickly. Well that’s the theory, the reality is different. There are good FOREX trading systems out there but you need to pick wisely, here are some tips.
1. Don’t buy a system that promises 80% accuracy and has little or no drawdown.
We all know this is not true, as we all know drawdown is part of trading a FOREX trading system. These systems always come with hypothetical track records and of course, we can all trade with low drawdown when we know what happened in the past.
2. Look for a system where the rules are revealed
You need to understand the logic before trading.
This is essential as if you don’t understand the logic you won’t have the confidence to trade it with discipline. Avoid black box systems only trade a FOREX system you understand.
3. Look FOREX trading systems that are simple.
They should only contain a few rules or parameters.
It’s a fact that simple systems work best and not ones that are complicated. All the worlds top trading systems are simple!
4. Look for a FOREX trading systems that trades ALL markets with the same rules.
One of the biggest errors traders make is falling for systems that have “unique” rules to trade different markets.
What this basically means is that the vendor cannot get the system to work on the market, so its “curve fitted” i.e. the rules fit the data in hindsight.
Never consider a system that does this!
5. Look for long term trading system
There is a huge market selling short term and day trading systems, but fact is they don’t work as well as long term trend following FOREX trading systems.
6. Get verification
While past performance is no guarantee of future performance some evidence of the system trading successfully by the vendor is a must. Let’s face it, if the vendor is not confident enough to invest his money why should you?
An alternative build your own
You can of course, buy a FOREX trading system and the above will help you locate the good ones, but today it’s pretty easy to build your own.
Perhaps the best method is a breakout method (it’s easy to understand and apply) and is described in our other articles. Simply combine it with some oscillators and your all set.
Many trading packages will let you apply your own rules and test them with realistic slippage and commission.
A FOREX trading system you have and understand yourself gives you a huge advantage, as you will be able to apply it with confidence and discipline which you will need to stay with a system, through periods of drawdown.