Look for experience

Many reputable people and firms will offer information on investment opportunities. The main way to find out if the offer is genuine is to look at the structure of the organisation that is making the offer. You need to go into the historical results and structure of the organisation.

In Australia, investment advisors need to be licensed. How long has the firm you are considering been licensed? If the people or firm have only been licensed for a year, then they have no previous historical results that you can look at. It might be wise to review them at a time further down the track when they have performance results to show you. Look for experience.

Beware The Unbelievable

In your research travels, you will come across all sorts of offers. Some are too good to be true. Often they are just that. Unfortunately, there are those people that become trapped in financial exploits and need money to bail themselves out. Often they need or want your money. These are dangerous investments. It takes a shrewd business person to rescue a financially exposed business opportunity. These are not investments for beginners. You may be offered ownership rights, with the majority of profit outcomes as a lure into financially rescuing a business opportunity. You see all the outcomes as positive, and are rarely aware of the downsides of costs and viability. A financial disaster awaits you.

Misleading Headlines

Headlines are meant to grab your attention. Brochures and advertisements rely on this. However with the misleading headline, once your attention is gained, the explanation behind the headline is never reached or given in the follow up. Headlines that state “Massive profits!” and “Opportunities never to be repeated!” are marketing tools that can be used to mislead the investor into believing that easy profits are to be made. The main question to ask here is that if easy profits are to made, has the person offering the product or service made the profits they are talking about, and if so why are needing investors to make the same profits? What’s in it for them? This cautious attitude will save you from many bad investments.

Good Information – Bad Information.

In summary, the three main points to look at are ;

1) Who

Who is giving you this information, what are the history and track performance records that can be verified?

2) What

What is on offer and is it too good to believe. It often will be.

3) Why

Why is the offer being given to you? Has the person making the offer completed and made the same profits that they are offering you?

4) When.

When is the offer expiring? Do not get pushed into acting by an expiration date. This is often used to stop you properly exploring the background information you need to make your decisions.

For more investment information visit http://www.investmentinformation.freedvd.com.au/

James McInnes is a professional share market trader and investment entrepreneur, with many years experience trading the Australian Share market. You can visit his site at http://www.investmentinformation.freedvd.com.au for further information on trading the Australian Share Market and investing.

Day trading does not work anymore.

We all have the same information at the same time and all moves in short term time frames are random. We will look at this more in a moment but let’s first give you the reality check on all those trading systems that claim big gains.

They all make big claims but there not real gains there in hindsight on paper and you will always see a disclaimer. Tell me would you trust any system with this on it:

“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”.

I wouldn’t but thousands do – this disclaimer allows you to make up anything you want and say hey it’s just a simulation!

What good is that? – We need to make money going forward and don’t have the luxury of knowing the closing prices.

Also why on earth would you trust someone saying how great their system is when they haven’t had the courage to trade it for themselves. Of course if it worked then you wouldn’t, even need to sell it judging by the track records the vendor would be rich beyond their wildest dreams – yet they offer you these riches for $100 or so bucks UMM.

You cannot tell where short term prices are going and that’s a fact and that’s why you never see a day trader make real gains – Your going to lose so don’t try. If you want to trade short term use a forex swing trading system.

Moves are short term a few days to around a week, you get plenty of action and it can be very profitable. You will find lots of swing traders who make money and no day traders.

To win you need to get the odds on your side and that means trading a longer term time frame. If you have not discovered swing trading check it out.

Day traders tend to be lazy or arrogant or think currency trading is easy – well its not that’s why 95% of traders lose all their money ( 100% in the case of day traders!) and of course you wouldn’t expect it to be with the rewards on offer

Fact is you need to get the right forex education and get the odds on your side and you can’t do that in a random trading environment.

Forex day trading will see you lose because you can’t get the odds on your side, so try swing trading and you can get the odds on your side and enjoy forex trading success.

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Forex Robots

Have rules build into them and there simply plug and play time efficient and require very little trading knowledge.

There are some good ones about that are sold online but most (about 99%) don’t work and the track records are simply made up and simulated in hindsight. Most carry the disclaimer below, look out for it and forget it:

“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”.

There are some that have been traded and tested and have real time track records but be careful – you still have to follow it with discipline and for this, you need to know how and why it works long term.

You need to be confident enough in its logic, to stick with it through periods of drawdown, if you dont understand how and why it works and have confidence in its ability to win longer term, your discipline will go and you have no system.

There are even some free ones that make money. I have written frequently on Richard Donchian’s 4 week rule and this incredibly powerful but simple system, is free! Look it up in our other articles.

Trading an automated trading system ( if you find the right one) is time efficient and easy – but you must have a disciplined and patient personality, to keep executing the signals in line with the rules and this is hard, when you had a losing period!

Manual Trading

There is a right way and a wrong way when trading manually – lets start with the wrong way.

The “shoot from the hip” news and story trader – He simply trades on a whim and of course as news is instantly discounted and his emotions are to the fore he losses.

The other trader is the trader who likes to do every trade manually but is still guided by rigid rules in terms of, executing his trading signal and money management.

I am this sort of trader and it suits me as I am involved and although I use rules I can pick and choose the best trades in terms of risk reward – this trading method is obviously my personal choice and each trader will know which method is right fof them.

You can make money with forex robots, just choose wisely and be prepared to have confidence and discipline in the system you follow. As a manual trader you still need discipline but it probably suits the trader who enjoys a challenge.

Which ever trading method you choose, remember to have a disciplined approach and make sure you employ rigid money management criteria, to lead you to long term currency trading success.

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Before we take a look at our free one, it lets see why most paid for ones fail to deliver and why you’re better off not paying for one.

Generally, they have never been traded and come with a simulated track record, using past data. This is the disclaimer you will normally see:

“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”.

What generally happens is a system doesn’t make money on first attempt, so the vendor adds more rules in and bends the system to fit the data. No two pieces of data replicate themselves exactly again and the system ends up wiping out the user.

This is known as curve fitting and most sold systems do it.

Now let’s look at our free one.

Its one rule that’s it so you can’t bend one rule by its very nature!

A Simple System for Profits

Now let’s look at the system. It’s called the 4 Week Rule and was devised in the late seventies by trading legend Richard Donchian.

Originally it was devised to work on commodities but works on any trending market and currencies trend well.

Here is the rule:

Cover short positions and enter longs when a price exceeds the highs of the previous 4 calendar weeks. Close long positions and go short when a price falls below the lows of the previous 4 calendar weeks.

That’s it!

Very simple – but it makes money and many of the world top traders have used this system and still use it today. Simple systems work best as they are more robust in the face of ever changing brutal market conditions.

The system works great in any trending market and will put you on the side of every major trend of course when the market is not trending it can suffer drawdown and here you may wish to alter the exit rule.

Rather than exiting on 4 weeks you can try 1 or 2 weeks then go long or short on the next 4 week trading signal.

This system is a long term trend following breakout based system and unless markets were to stop trending long term it will continue to work.

Its free so don’t discount it, trading legends such as Richard Dennis were fans of it and if its good enough for him then it really is good enough for you – it works.

It’s a simple highly effective logically based system that anyone can understand and use and you should consider it. Try this currency trading system in a demo account and follow it rigidly to prove the profitability to yourself and make it part of your forex trading strategy for success.

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This system beats all the ones you see for sale because – its got a track record in real time and is NOT curve fitted.

Most systems you see for sale, have never been traded and have there track records bent to fit the data, in meaningless paper simulations.

Seen a forex robot for sale? Then look for the warning below – your bound to see it:

“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 vendor simply bends the track record in hindsight, until it works on the data.

As no two pieces of data ever replicate themselves exactly it loses. Would you trust a system with the above disclaimer written on it I wouldn’t consider a system which has made paper money, if I want paper profits I can play Monopoly!

The one we are going to look at is different.

Many top traders have used and even the legendary Richard Dennis was a fan of this forex trading system.

Here it is and it is based on just one rule:

In a calendar month buy a new 4 week high or sell a new 4 week calendar low. The system is a stop and reverse so will always be in the market – that’s it.

Simple?

Sure it is – but it makes money and that’s what any forex trader wants.

It will get you on the right side of every major trend and works in any trading market not just currencies.

It was devised back in the seventies by legendary trader Richard Donchian, who is considered the grandfather of modern trend following. Originally, it was devised to trade commodities but works on currencies, as they are great trending market.

No system is perfect and this system will get chopped when markets don’t trend, so you may wish to re consider the exit rule and exit on a 1 or 2 week high or low and go flat, then enter on the next 4 week signal.

Will most traders use the above?

No they wont, they will say its to simple and can’t work- but test the rule and it does and always will, because its based on trending markets and breakouts.

In fact, simple systems work best, because they are more robust in the brutal world of real trading, with fewer elements to break.

It may not have the image of a neural network, system based on chaos or Fibonacci but in the cold hard world of trading where fancy names don’t matter, it will probably beat 90% of them hands down.

So if you want a robust forex robot, which is simple to understand, takes only a few minutes to apply and makes big long term gains check it out and remember it will cost you nothing – just some time and trust me, that will be time well spent.

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First avoid any system that carries this disclaimer.

“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 this will be stated

“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”.

So the track record is not a track record of gains at all it’s a paper simulation and you should avoid these

You want something that is proven to work in real time so seek out a forex trading system which has been proven and this means the following:

1. Audited track record at least two years long

2. Logic is fully disclosed and not black box

You need a real track record to show logic is soundly based and this really needs to be over a few years. Many systems present a track record over a couple of months – this proves nothing. Its long term you want and a variety of market conditions.

Forget about the idea of practicing in a demo account unless you want to do it for a few years it’s a waste of time. Look at the logic and track record check the vendor’s background and see if it makes sense to you. You also need to know the logic it’s based on so you can have the confidence and discipline to follow it through losing periods.

Not being able to ride out a drawdown period , is a common problem for traders they quit early when they could have won don’t make the same mistake expect drawdown as part of normal forex trading.

Many traders think it’s hard but you can build your own system and it’s a lot simpler than you may think. Furthermore there is an excellent free system we have written on the 4 Week Rule and we have used this since the eighties with success and great news is its free!

So if you want to win, make sure you avoid the simulated track records and get a real one that’s proven. You can also use the free one we have given you or build your own. Then understand any automatic forex trading system you use needs to executed with discipline, which comes from confidence and knowledge, on how and why it works.

So there you have it, your forex trading system can be a road to riches or ruin. If you want the route to profits and currency trading success, note the tips in this article.

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