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 ‘Hindsight’
Fx Trading Strategy – the Application of Mathematics to Reveal the Theory of Market Movement
December 30th, 2009Forex Trading Systems – Applying Mathematical Theories for Profit for Huge Gains
December 24th, 2009The PC on your desk has far more processing power than Mission Control Houston which landed man on the moon and with the speed, at which we can test systems today, mathematicians apply complex theories for bigger gains but which are the best theories and systems?…
Before we start lets contrast some data in relation to winners and losers in the forex market. 50 years ago before we had PC’s and the Internet 95% of traders lost and today, the ratio is the same.
Think About This
This is despite the vast strides we have made in technology and the conclusion is obvious – it hasn’t helped increase the ratio of winners.
Markets are Based on Odds of Success Not Certainties
The reason for this is simply prices DON’T move to a mathematical formula, forex markets are an odds based game only. You are dealing with probabilities NOT certainties.
There are many clever people out there who will tell you, they have found the way to predict market movement – but if there was such a theory they wouldn’t tell you about it (they would be making to much money) and of course there isn’t one; also If there was, we would all know the price in advance and there would be no market – obvious really.
The people who claim there is, are simply presenting back tested theories, simulated and in hindsight to prove their point – but that means nothing. Anyone can make money, if they know the closing prices but you have to trade forward!
TO WIN YOU NEED TO DO THIS!
As part of your essential forex education, forget about being complicated the markets will not reward you.
The best forex trading systems are simple and robust, complicated ones have to many elements to break.
Getting a robust forex trading system is only part of the equation for success; you have to play the odds and this means you are going to look stupid at times and have to take periods of losses.
Anyone who tells you that you don’t is wrong.
Even the best traders in the world take many weeks of losses but they still win.
They win because they have the confidence in their system to ride out the period of losses and lead them to success – it is the discipline to keep losses small and run profits, with strict money management which is the key to currency trading success.
Today, most traders look to forex robots to lead them to success but most are sold on hype of a back tested track record and are doomed to failure. Saw one which claimed it had been worked out by a maths whiz kid well, that’s no recommendation or guarantee of success!
Forex trading is simple, many traders make it more complicated than it really is and if they looked at the facts, they would see the reality which is:
A simple forex trading strategy, you have confidence in and can apply with discipline is the key to success in forex trading.
By: Samuel Leslie Berkovits
