Today, traders all around the world are using complex computer programs and mathematical equations to work out the scientific theory of market movement. What are the results and how can they benefit your FX trading strategy?
Let’s start with a fact:
Today 95% of traders lose their money and it’s the same ratio as 50 or 100 years ago and this is despite all the so called advances in computers, forecasting and number crunching applied and this leads to an obvious conclusion.
Forex markets don’t move the certainties i.e. mathematics, they only move based upon odds and you can try as hard as you like to apply science and maths – but if prices move to the odds this is futile. It’s obvious:
If markets moved to a mathematical theory, we would all know the price in advance and there would be no market! Common sense – but traders love complexity, it makes them feel safe and they think it cuts risk. They may love it but it won’t help them.
Today there is a huge industry in robots and automation is the buzz word and you see extra ordinary profits in hindsight and simulations – but they never work in real time, because no two pieces of data are ever the same and you really are chasing your tail if you try it.
Just as in yester year, simple forex trading systems work best, as they are more robust with fewer elements to break. A simple odds based system should be the basis of your FX Trading strategy. Don’t be deceived a simple odds based system can make a lot of money.
The problem today is we are used to science and maths solving problems in life and making our life easier, more comfortable and it does – but that doesn’t mean it works in all areas of life and the forex market is one, where it doesn’t. You need to keep it simple, have confidence in what your doing and if you do, you can enjoy currency trading success.
So stop trying to beat the market and see it for what it is, a high stakes, high odds game and get the right forex education. If you keep it simple and trade the odds, you can make a lot of money with your FX trading strategy and that’s a fact.
By: Kelly Price
Posts Tagged ‘Buzz Word’
Fx Trading Strategy – the Application of Mathematics to Reveal the Theory of Market Movement
December 30th, 2009Forex Trading – Why Complicated Mathematical Algorithm Based Systems Lose
October 24th, 2009There a big buzz word at the moment and many people will tell you, that a complicated mathematical algorithm based system, can help you win at Forex – but they don’t work and there is a better way to trade…
Fact: Forex markets do not move to certainties and are not a market with mathematical structure, so what good is a complex mathematical algorithm?
Not much use at all.
Forex robot vendors sell this theory, with their sure fire systems and promise of riches with no effort but these robots are junk and the market teaches them some respect, by giving them a wipe out of equity.
It’s a fact that simple systems work better, than those based on complex mathematics. Forex markets are an odds based market and in a brutal ever changing, world of currency markets, a simple system is more robust, with fewer elements to break than a complicated one and more likely to win.
If you want a graphic example of how complex systems don’t help traders win, look at the ratio of winners to losers. 50 years ago 95% of traders lost and the same ratio applies today, despite all the advances in technology.
People see technology enrich our lives, in areas such as transport, health and communications and immediately think it will enrich their trading experience – but it doesn’t.
Forex trading success is based upon the same fundamentals it was based on 50 or 100 years ago which are a simple, odds based system, combined with good money management and applied with discipline.
Leave complex mathematical algorithms, to the dreamers, nerds and losers.
Keep you’re trading simple and robust, apply your system with confidence and discipline and you can enjoy currency trading success.
By: Kelly Price
