Posts Tagged ‘forex trading system’

Mechanical Forex Trading

Systems – Building Big Gains

Long Term With Robots

Mechanical forex trading systems are a great way to make money if you find the right forex robot. There time efficient and can give you a disciplined route to profit however not all forex robots are created equal and the fact is the vast majority will wipe you out. This article is all about finding the ones which can lead you to currency trading success.

The first step in finding a forex trading system for profits is to pass by any that carry this on them as a warning:

"CFTC RULE 4.41 – 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 shown".

The above is on the vast majority and if you want to trade a system which has never been traded then you’re asking for trouble. It’s not proven and we can all make up track records.

You can shop around and find some systems which have real time audited track records over a few years and you get what you pay for, there not cheap and you certainly won’t pick up a good one for under $1,000 and expect to pay a lot more for some.

If you do buy one, make sure you check the worst peak to valley drawdown and it suits the risk you want to take. Also make sure you understand how and why it will make money – you must know the logic. If you don’t, you won’t have confidence in it and be able to follow it through periods of loss and drawdown.

A , for Big Gains!

Surprisingly there is a free one you can use which makes more money than 95% sold online. It’s been around for over 20 years and has been used by some of the top traders in the world and don’t assume because its free it doesn’t work it does and really is a great system to use. The logic is soundly based and it’s easy to understand why it makes money.

Its called the 4 Week Rule and was originally devised to trade commodities by trading legend Richard Donchian – but it works a treat on currencies, as its designed for long term trend following and currencies trend long term.

Here is Richard Donchian’s 4 Week Rule:

Liquidate any short positions and go long whenever the price exceeds the high of the previous 4 calendar weeks – reverse this trade, when the price falls below the lows of the previous 4 weeks. This system will maintain a long or short in the market all the time.

Simple? Yes, you could hardly find a simpler system but it works test it and see.
If you use it, you will be in on every major trend and long term it makes money. In the short term if markets don’t trade expect some losses but if you want to add a filter to prevent these you can. Exit on a 1 or 2 week stop and then simply take the next 4 week trigger.

Simple systems always work best, as they are more robust than complicated ones. The one above is just, that and has stood the test of time. It has been used by a huge number of traders and made countless millions in real time. Its free,check it out and you will surprised at how much money it makes.

So if you are looking for a mechanical forex trading system, avoid the vast majority with simulated track records and buy one which has at least been proven, or of course you can try the FREE one above which in our view is one of the best around, it won’t cost you a cent and could lead you to currency trading success.

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By Michelle Hendrix
Published: 6/30/2008 

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