When you first start to look for Forex systems you will no doubt be staggered by the quantity and variety of systems that you can find online. Many of the these systems require the individual to make the final decision to trade from the indicators provided. They supply you with the indicators and a set of trading rules for the strategy. Other systems are fully automated and are more popularly known as Forex robots. This is something of a black box solution to trading with the system simply left to run on your account. These systems however fail to provide and external trading logic, such as taking account of news developments and simply process their strategy as is.
It is surprising to note that nearly all of these Forex systems make assertions of being able to make you a high level of easy profits on your Forex account! Often they will boast of being able to double or even triple the value of your account depsoit in just a few weeks or months! However you need to be sceptical of most of these claims, as if this were the case, then everyone would be using them and reporting the same big profits. But the based on account profitability disclosures of US Forex brokers made on October 8, 2010, only less than 25% of the accounts of held by most of them were profitable .
Apparently, many individual investors have resorted to developing Forex systems and selling them to other traders through affiliate networking to recoup their trading losses. Therefore we have to wonder again whether a Forex system that can deliver you reliable profits from the markets has actually been created?
The central aim of a Forex system is to identify reliable and accurate levels in the market where a profitable position can be taken. The also need to be able to add a degree of real world thinking before entering a position to decide the risks involved. Newbie traders as well as some seasoned traders can be swayed by their emotions when trading decisions are made. They may trade out of fear and decide to exit the market prematurely cutting positions at a loss when they could have generated profits instead.
Greed may at times get the better of them and make them hang on to profitable positions too long in the hope of making more only to face a sharp market turn around running their profits into losses. Nervousness in initiating a trade makes them indecisive at times allowing good trading opportunities to pass them by. A great Forex trading system must therefore must be designed with these two goals in mind - 1) Be able to generate accurate price action points based on the traders pre set profit objectives and pre-determined maximum allowable drawdown per trade It should assist the trader in keeping control of their emotions when trading the system.
Profitable Forex systems should not only be able to deliver targeted profit objectives, they also need to be simple enough to use by even the most inexperienced traders. Not only should they be able to prove their effectiveness, accuracy, and profitability through back testing using historical data, they should also be able to withstand the test of time.
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