The rise in popularity of online currency trading has seen a huge surge in the number of forex day trading systems sold. They are an attractive option for many novice traders, who see them as a low risk high reward way of trading.
Let’s look in more detail at these forex day trading systems and how you can profit from them.
Forex day trading systems don’t work and if you don’t believe me, read on and you will see why this method of trading should be avoided at all costs.
1. The Data Is Unreliable
The data is absolutely meaningless because the time period is to short so if as with most forex trading systems they are using forex charts to generate signals the system is doomed to fail.
For example, when a life assurance company works out premiums they don’t just use 1, 2 or 10 people, they look at the bigger picture. They use millions of people to calculate the odds and it’s the same in forex trading:
You need data that gives you a big enough snapshot to calculate the odds.
2. The Proof
If you want proof try and find a forex day trading system that has a real time track record of profits when you go to buy one, over the long term and you won’t get one.
All you will get is hypothetical one in hindsight (not exactly hard to make a profit when you know the closing prices!) so these should be treated with extreme caution unless they have been tracked in real time currency trading.
3. Profits and Losses
Day trading also breaks another rule that is the cornerstone of all successful forex trading strategies – Run your profits to cover your inevitable losses.
In day trading losses are kept small (even thought he odds are high you will lose) but running profits is never in the equation.
Most forex day trading systems look at scalping a quick profit or closing the position out quickly – so even if the currency day trader has a profit he doesn’t run it!
The result is, the total loss of equity in the account.
4. The Real Way to Make Money
Is to have the odds on your side and be able to calculate the odds.
If you want to learn forex trading look at swing trading, or long term trend following and base your forex trading strategy on these methods – you then have meaningful data that can help you calculate the odds.
Forex day trading systems sound great in theory, but the reality is these systems are sold by vendors who have enticing marketing copy and nothing to back it up.
They make money selling systems NOT from trading.
Avoid day trading and don’t make it part of your forex education, or you will never achieve currency trading success.