Forex Trading Systems

Who doesn’t want to make money? Traders who have been in the big money business are all about stocks and shares, investment markets, equity markets, commodities, derivatives and of course FOREX or more accurately the foreign money exchange. The Forex market seems to have attracted a great number of people who want to try their luck in cashing in on the rate changes of different currencies due to news or some activity in the markets. You truly have to be fully focused when dealing with Forex; this is mostly due to the fact that market fluctuation plays a great role in any kind of financial trade.

Over the years technology has influenced forex trade to a great extent, and today there are so many forex trading systems available in the market. The complexities of these forex trading systems also vary. If you’re a beginner there are forex trading systems according to your needs and also if you are an experienced trader with many years of experience under your belt there are Forex trading systems suiting you as well.

Let’s take a look at two extremes among Forex trading systems: If you’re a beginner to trading there’s a system called the “black box” which is ideally suited for you. In this system the user rarely makes any decision and you simply buy the currency when the system sends out the green signal and when it shows the red signal you sell. These systems are said to have no discretion or zero discretion.

The other extreme lies in “complex” systems which are best suited for people with a lot of existing trading experience and have seen and more importantly understand the trading charts. In this system it is up to the user to watch the market and buy currency based on what they see therein. These systems are said to have a high discretion rate. These systems are definitely not meant for the beginner.

But however technologically advanced the Forex trading systems are they cannot judge the various situations that a trader might have to face in terms of forex trading. As you really need to be extremely careful about minor/major happenings and news that might have potential to fluctuate the market. The market by design is very dynamic and reacts to all forms of news. Be it government policies or natural calamities, the market is influenced by everything. So in forex trading you really have to follow up with international news of the foreign land in whose currency you are trading. You have to keep studying the patterns and should be able to identify as to when the patterns repeat themselves. But as it’s said: “No one can predict the market and past benefits do not assure future returns” which is absolutely correct, you cannot actually depend on a system, logic or anything to make a profit. But irrespective of that, analysis is done around the world and newer technologies and methods are created, and strategies devised to create profits.

It’s possible that you’ve been evaluating a forex trading system which was successful in profiting you for the first two years and then started incurring losses; the are many reasons why this might be happening, it may be the market patters and charts have changed over some news or event. Many expert traders use automatic back testing software to test their respective systems which go on to test the data from past years. But this isn’t always guaranteed as we already know that due to the dynamic nature of the market past data cannot accurately help us reap future benefits and most of the time the data is not actually very accurate.

Nevertheless whatever system you decide on, it’s really all just luck. Forex systems are just an aid to help you along, depending completely on your Forex trading system or trusting these systems blindly can mean your financial downfall. If you are a beginner do not go for the costly systems because as you do not know the tricks of the trade you might not want to incur loss and lose your investment.