Archive for October, 2009
Kelly Price asked:
There are lots of forex trading systems you can buy off the self and they will all claim to make you money, but the fact is over 95% of them lose. So how do you spot the good ones from the scams? It’s easy if you know what to look for.
The first thing to look for with any forex trading system is the track record and if you see the disclaimer below be extremely cautious. We will explain what it means in a moment but for now here it is and its required by the CFTC.
“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 show”.
If you have read the above and understood it, you will see that vendors can simply make track records up (and they do), as they can use past data and say what they want! So long as they put this disclaimer on the material their covered.
Of course most forex traders simply concentrate on the gains and do realize these track records are actually meaningless.
Anyone can do a track record in hindsight, knowing the closing prices but it’s not so easy in real life – we have to trade forward!
The fact is most of the currency trading systems sold on the net today are never traded at all – there simply done by marketing people and track records are made up to appeal to the greed and naivety of investors.
So the first step is simply to ignore any forex trading system that does not have a real time track record and believe me, you have cut out at least 95% of systems.
You may say well there must be some honest guys out there selling systems?
Yes there are and some simulations do come good (a small minority) but why should you risk you money?
If the vendor hasn’t the confidence to trade neither should you.
Once you have found a real time track record look for the following:
1. It is over a reasonable period of time at least 3 years.
2. Check the drawdown and look for the worst peak to valley drawdown to see if its in line with your risk – reward criteria.
3. Check the logic is revealed so you can have confidence in it
4. Check the support and find out if you are comfortable with the vendor
While a real time track record does not guarantee profits it is a good indication of the potential of the system and if you know how it works and are comfortable with its worst peak to valley drawdown and time to recovery chances re you can follow it with discipline.
Don’t look to make a fortune over night – the best systems will do up to 50% per annum and that will build you fantastic compound gains over time.
If you want bigger growth you will find many simulations offering you more but you know what will happen if you buy it!
Be sensible when buying forex trading systems and remember, all those track records that look to good to be true are! There is no “free lunch” when it comes to make money.
Caffeinated Content
There are lots of forex trading systems you can buy off the self and they will all claim to make you money, but the fact is over 95% of them lose. So how do you spot the good ones from the scams? It’s easy if you know what to look for.
The first thing to look for with any forex trading system is the track record and if you see the disclaimer below be extremely cautious. We will explain what it means in a moment but for now here it is and its required by the CFTC.
“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 show”.
If you have read the above and understood it, you will see that vendors can simply make track records up (and they do), as they can use past data and say what they want! So long as they put this disclaimer on the material their covered.
Of course most forex traders simply concentrate on the gains and do realize these track records are actually meaningless.
Anyone can do a track record in hindsight, knowing the closing prices but it’s not so easy in real life – we have to trade forward!
The fact is most of the currency trading systems sold on the net today are never traded at all – there simply done by marketing people and track records are made up to appeal to the greed and naivety of investors.
So the first step is simply to ignore any forex trading system that does not have a real time track record and believe me, you have cut out at least 95% of systems.
You may say well there must be some honest guys out there selling systems?
Yes there are and some simulations do come good (a small minority) but why should you risk you money?
If the vendor hasn’t the confidence to trade neither should you.
Once you have found a real time track record look for the following:
1. It is over a reasonable period of time at least 3 years.
2. Check the drawdown and look for the worst peak to valley drawdown to see if its in line with your risk – reward criteria.
3. Check the logic is revealed so you can have confidence in it
4. Check the support and find out if you are comfortable with the vendor
While a real time track record does not guarantee profits it is a good indication of the potential of the system and if you know how it works and are comfortable with its worst peak to valley drawdown and time to recovery chances re you can follow it with discipline.
Don’t look to make a fortune over night – the best systems will do up to 50% per annum and that will build you fantastic compound gains over time.
If you want bigger growth you will find many simulations offering you more but you know what will happen if you buy it!
Be sensible when buying forex trading systems and remember, all those track records that look to good to be true are! There is no “free lunch” when it comes to make money.
Caffeinated Content
Roger Kevin Johnson asked:
In the forex market trading, you probably heard of forex robot software. For some reason or two, the news has been circulating about this software. This has been the subject of craze for investors and potential investors alike especially because of the prospect of paving way for a good dose of money. For those who are really monitoring the forex market for quite some time, chances are, they already heard of the latest buzz: forex robots. Indeed, robot software has drawn the attention of a lot of people. And the world is divided on the stance to take: would they go with the flow? Will they purchase before it’s too late? Are these robots’ promises of earnings really tenable? Some are still shrouded with skepticism. This might be another ploy of corporations to gain money from. The question is raised, do they really work? As we embark in the world of investing, there are things you have to consider before even deciding to purchase one.
Here are some points to ponder.
For most of the people who don’t have a lot of time scrutinizing the currency market, forex robot may suit them. These are automatic systems, anyway, as people declare. They could be left behind to do their assigned tasks. They require the tiniest human intervention to work properly. What you need to do is to program your specific instructions and presto, it executes trades for you. Forex robots work in such a way that even though you don’t know concrete and substantial things about the market itself, you could still participate. If you are an amateur in trading, or have not traded for your entire life before but believes it is imperative to start investing as soon as possible, then this might be your chance. The people who would best benefit from this system are those who just don’t know that much about the market but are enthusiastic to engage in investing for their future.
Experienced investors have their piece of cake also. Using forex robot may perfectly aid them in improving their trading results. They already have sufficient market knowledge, that’s an advantage. They know how the system works. Perhaps, they have already made sum of money in perpetual trading. What they need is a tool for efficiency, the one that could execute their trading expertise seamlessly and in efficient manner. What the robot can do for them is to replicate many times good trade transactions to accumulate profits. Market knowledge plus forex robots can be an astounding partnership.
It is overstatement to say that the market is now flooded with forex robots. On the other hand, it is safe to assume that forex robot providers are fiercely competing to gain market share while the world is attracted by this technological feat. This glut of providers and the multitudinous versions of software they produce have confused customers. They are forced to spend their time and energy going from one manufacturer to another, from one model to another, from one version to the next. Indeed this is one healthy product of competition. However, this gaps the investors from the real motive: to start trading with the software to ascertain whether the claims are indeed true or just empty promises.
Whether earnings are just there to fish with forex robots, the investors will be the ultimate judge. Meanwhile, it is but a milestone in trading to have produce forex robots.
Caffeinated Content
In the forex market trading, you probably heard of forex robot software. For some reason or two, the news has been circulating about this software. This has been the subject of craze for investors and potential investors alike especially because of the prospect of paving way for a good dose of money. For those who are really monitoring the forex market for quite some time, chances are, they already heard of the latest buzz: forex robots. Indeed, robot software has drawn the attention of a lot of people. And the world is divided on the stance to take: would they go with the flow? Will they purchase before it’s too late? Are these robots’ promises of earnings really tenable? Some are still shrouded with skepticism. This might be another ploy of corporations to gain money from. The question is raised, do they really work? As we embark in the world of investing, there are things you have to consider before even deciding to purchase one.
Here are some points to ponder.
For most of the people who don’t have a lot of time scrutinizing the currency market, forex robot may suit them. These are automatic systems, anyway, as people declare. They could be left behind to do their assigned tasks. They require the tiniest human intervention to work properly. What you need to do is to program your specific instructions and presto, it executes trades for you. Forex robots work in such a way that even though you don’t know concrete and substantial things about the market itself, you could still participate. If you are an amateur in trading, or have not traded for your entire life before but believes it is imperative to start investing as soon as possible, then this might be your chance. The people who would best benefit from this system are those who just don’t know that much about the market but are enthusiastic to engage in investing for their future.
Experienced investors have their piece of cake also. Using forex robot may perfectly aid them in improving their trading results. They already have sufficient market knowledge, that’s an advantage. They know how the system works. Perhaps, they have already made sum of money in perpetual trading. What they need is a tool for efficiency, the one that could execute their trading expertise seamlessly and in efficient manner. What the robot can do for them is to replicate many times good trade transactions to accumulate profits. Market knowledge plus forex robots can be an astounding partnership.
It is overstatement to say that the market is now flooded with forex robots. On the other hand, it is safe to assume that forex robot providers are fiercely competing to gain market share while the world is attracted by this technological feat. This glut of providers and the multitudinous versions of software they produce have confused customers. They are forced to spend their time and energy going from one manufacturer to another, from one model to another, from one version to the next. Indeed this is one healthy product of competition. However, this gaps the investors from the real motive: to start trading with the software to ascertain whether the claims are indeed true or just empty promises.
Whether earnings are just there to fish with forex robots, the investors will be the ultimate judge. Meanwhile, it is but a milestone in trading to have produce forex robots.
Caffeinated Content
Rocko Chen asked:
Cash exchange rates, an Over-The-Counter (OTC) instrument, has become an easy-profit tool for many private business ventures, calling themselves legitimate Forex brokers. However they promote it, the business model reeks.
Selling Fantasies
Every ad starts with some wild claims of something along the lines of “Make $5,000 a week sitting at home!”, “Easy money from Forex!”, or anything else with excessive amounts of exclamation marks, you get the drift. They entice people with fantasies where truth lies away in distance.
What is the truth?
Unlike centralized exchanges (e.g. NYSE, AMEX, CBOE, and etc.), OTC item prices settle upon agreement of two private parties, unregulated. The Forex brokers understand this and exploit it for profit.
These bucket shops trade against the clients, i.e. they serve as market makers and more often than not take the other side of trades against clients. They understand statistically that most financial market traders perform with negative expectancies, hence making trading against a losing crowd profitable business. This aslo explains why they target and welcome financial industry newbies so much.
What about the ones smart enough to eventually trade profitably? These brokers operate to preserve capital, and they resort to whatever means available and prevent consistent winnings off any client. Software disconnects, lagging/fraudulent price quotes, unfilled orders, or simply account banning have become some, certainly not all, common bucket-shop practices.
The above explains why most Forex brokers have incentives for clients to lose, and hence not legitimate. It has given Foreign Exchange trading a bad name, though it can become lucrative still, just not through the typical bucket-shops.
Trading Forex Away From Bucket-Shops
Electronic Centered Networks, ECNs (like ARCA or BatsTrading), allow traders to interact without market makers. These types of brokers charge very low commissions and have only incentives for clients to trade profitably.
Foreign Exchange options also provide profit driven opportunities for those adept in forecasting exchange rate moves. Centralized on option exchanges, these derivative instruments not only provide valid markets, the added leverage promotes higher potential returns.
Caffeinated Content
Cash exchange rates, an Over-The-Counter (OTC) instrument, has become an easy-profit tool for many private business ventures, calling themselves legitimate Forex brokers. However they promote it, the business model reeks.
Selling Fantasies
Every ad starts with some wild claims of something along the lines of “Make $5,000 a week sitting at home!”, “Easy money from Forex!”, or anything else with excessive amounts of exclamation marks, you get the drift. They entice people with fantasies where truth lies away in distance.
What is the truth?
Unlike centralized exchanges (e.g. NYSE, AMEX, CBOE, and etc.), OTC item prices settle upon agreement of two private parties, unregulated. The Forex brokers understand this and exploit it for profit.
These bucket shops trade against the clients, i.e. they serve as market makers and more often than not take the other side of trades against clients. They understand statistically that most financial market traders perform with negative expectancies, hence making trading against a losing crowd profitable business. This aslo explains why they target and welcome financial industry newbies so much.
What about the ones smart enough to eventually trade profitably? These brokers operate to preserve capital, and they resort to whatever means available and prevent consistent winnings off any client. Software disconnects, lagging/fraudulent price quotes, unfilled orders, or simply account banning have become some, certainly not all, common bucket-shop practices.
The above explains why most Forex brokers have incentives for clients to lose, and hence not legitimate. It has given Foreign Exchange trading a bad name, though it can become lucrative still, just not through the typical bucket-shops.
Trading Forex Away From Bucket-Shops
Electronic Centered Networks, ECNs (like ARCA or BatsTrading), allow traders to interact without market makers. These types of brokers charge very low commissions and have only incentives for clients to trade profitably.
Foreign Exchange options also provide profit driven opportunities for those adept in forecasting exchange rate moves. Centralized on option exchanges, these derivative instruments not only provide valid markets, the added leverage promotes higher potential returns.
Caffeinated Content