In recent years programmers have started to develop computer programs, using sophisticated algorithms, to predict Forex price movement with aim of making big Forex profits. Let’s take a look at them…
The move toward computerized trading has seen a huge rise in the number of Forex robots sold and traders are looking at them to give them profits but they end up disappointed, as these systems always lose.
The reason for this is you cannot apply mathematics to a market that is not mathematical! You cannot predict Forex Price movement in advance but you can win, but the trading system you use should be simple and robust. Lets look at a system to win in a moment, for now lets look at why Forex markets cannot be predicted.
The fact is if they could we would all know the price in advance and there would be no market. The Forex market moves to odds, not certainties and in an odds based market, the simpler the system the better, because it will be more robust with fewer elements to break.
If you think about it, we have seen massive advances in technology in the last 50 years yet the ratio of winners to losers remains the same at 95%, so technology is not the answer to making Forex profits. A simple system is – but the key is applying it with discipline.
Any system used should not predict but react to the reality of price change, that’s when you have the odds on your side and can win. It will lose for periods and you will suffer drawdown all the best systems do and your key to success is to keep your losses small and trade with discipline.
The Forex robot industry has promoted the myth of prediction in advance; no real losing periods and small drawdown – but this is not reality. Most robots are junk anyway, but even the good systems you can find, need to be applied long term with discipline.
If you want to trade Forex and make money from Forex price movement, then all you need is a simple system which trades the odds.
A good choice for your Forex trading strategy is a long term breakout strategy and then you simply need to apply it with discipline for long term currency trading success.
Forex is simple and if you make it complicated, you will join the 95% of losers
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