There exist a whole universe of forex trading systems out there – some are free and basic, while others require a deep and clasping financial investment to get hold of. Without question, every forex trader will need to pay some heed towards the system that they employ to pick out trading opportunities. In this article we’ll look over how the new trader can go about selecting a powerful forex trading system that delivers long term profits.
How To Pick A Potent Forex Trading System
When selecting between potential systems, keep the following in mind:
1. Understand That There Are NO Foolproof Systems. Don’t be gullible. The reality is that there is no system out there that can guarantee results, at least not to the tune of 100%. The forex market by its very pedigree is unpredictable. Some systems trick the unaware and inexperienced by claiming that the system has delivered amazing gains over a certain period in the past. These systems are often designed using a “curve fitting” methodology where the system is tailored to what the market has done in the past.
2. Don’t Invest Too Much Of Your Equity In Your System. A good forex system should not deplete you of your available equity. While you will want a reliable trading system, the majority of your funds should always be available to be used for trading only.
3. How Reputable Is The System Developer? If the system you’re using has been put together by a computer programmer rather than a real trader who understands the nuances of the markets, you’re asking for trouble by using it. Check the background of the person who has put the system together – are they making money by actually using their own system, or only by selling it to others?
4. Beware Hidden & Residual Costs. Some systems may have a hidden cost attached to them. Check the small print before buying, and understand what your obligations are before investing.
5. Go Over The Refund Policy With A Fine Toothed Comb. If you’re investing in a paid system, make sure there is a “no questions asked” refund policy available. Some trading system developers are quite sly in that they will only offer refunds when their system or robot has been tested on real equity rather than a practice account. There’s little point in getting a refund only after a useless system has flitted away all of your equity.
6. Using Free Systems The Right Way. There are now many free trading systems and robots available. While many have a catch, some can be used on the fly – when putting these systems to the test, it is imperative to try it out in a practice account before risking your real equity.
7. Before Investing In A System – Bone Up On Your Trading Knowledge. A trading system should be an accomplice to profitable trading. Good traders understand that while a system is needed, it is ultimately their own trading knowledge, ability and experience that is the true determining factor. A system can never be a short cut to forex trading success – if your trading knowledge and experience is poor, work on this aspect first before investing in a system. Because, without that knowledge and experience it would be impossible to distinguish a good system from a poor one.