Best Forex System - Beware of Backtesting!
by Harold Hsu
What is backtesting?
Backtesting is essentially the testing of a trading system using historical market prices, to see how profitable that system can be. This testing is usually done with computer software that runs the trading system through a period of time in the past.
Why beware of backtesting?
Many new traders think that good backtesting results will guarantee similar results in the future. This is a big mistake because a system that has worked in the past may not necessarily work in the future. This is because the Forex market is always changing and evolving. The Forex market today can be very different from the Forex market last year. The past does not equal the future... if it did, we'd all be millionaires by now!
What about trading systems with good backtesting results?
Because everyone knows what has happened in the past, it's easy for anyone to create a trading system that can be very profitable during that time (in the past). But remember: we're not trading in the past; we're trading in expectation of the future. Trading systems with good backtesting results may very well fail miserably in the future.
But this fact has not stopped unscrupulous people from selling Forex trading systems based on "excellent" backtesting results. They use impressive hypothetical (i.e. backtested) results as a sales tool. Unfortunately, many traders purchase these trading systems only to have them fail miserably and causing them to lose thousands of dollars.
What can I do to protect myself?
When looking for a good trading system, ask the system developer whether the trading results are actual or hypothetical. Many people assume that hypothetical returns are actual returns, but that's just not the case.
Now that you know it's easy to create a trading system based on backtesting (i.e. hypothetical) results, you'll hopefully be more skeptical about trading systems with little or no actual trading results.
Summary
While backtesting can be a very useful way to test a trading system, it's definitely not an accurate measure of how the system will perform for you in the future. Be wary of scammers who use hypothetical returns to try and sell you something!
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Showing posts with label Forex Killer Strategy. Show all posts
Showing posts with label Forex Killer Strategy. Show all posts
Best Forex System - Beware of Backtesting!
Saturday, April 4, 2009 Best Forex System, Forex Killer Strategy, forex market, forex online trading, forex trading
7 Reasons Why FOREX Trading Is Better Than Stock Trading Or Futures Trading
Monday, March 30, 2009 Forex Killer Strategy, forex trading, forex trading course, Huge Gains, Internet Forex Trading, make Money Fast
7 Reasons Why FOREX Trading Is Better Than Stock Trading Or Futures Trading
by Yusoff Allian
1. Trade 24 hours a day! With the possible exception of a few hours on the weekend, the FOREX market is open around the clock. Compare that to the stock market and the futures market which usually opens at 9:30am and closes at 4pm EST in North America. Due to the global nature of the FOREX market you're able to trade at your convenience, day or night.
2. No commissions. Tired of paying upwards of $30 per trade for a simple stock transaction? You don't have to worry about that when trading on the FOREX market. Your FOREX broker makes their money by taking the difference in price between the ask price and bid price for the currency being traded. This means no money out of your pocket.
3. Instant order fulfillment. A common complaint (and sad fact of life) when it comes to trading on the stock or futures market is that there is often a delay between when you place your order and when it actually gets filled. This can mean the difference between making a bundle and making nothing at all. Due to the incredibly high volume of transactions that occur daily on the FOREX market you can fill your orders instantly based on the real-time data you see on your trading platform. There can be occasions when the market is particularly volatile which can result in some minor delays, but for the most part you get what you see is what you pay for.
4. No middlemen. Unlike equity exchanges, FOREX traders can access the market maker directly without having to go through an intermediary first. This means that a FOREX trader can buy or sell directly from the entity that decides on the price for a given currency pair. Because an extra layer of communication has been eliminated, FOREX traders benefit from cheaper costs and gain quicker access to trades.
5. No unfair influence. We've all seen it on T.V. or read about it on the news - talking heads telling us to buy when a stock's price is plummeting, assuring us that everything will be alright in the end. The truth is that the only one that wins is the firm issuing that so-called advice while the average investor is left to lick his wounds. The FOREX market cannot be influenced by any one brokerage or person as it is representative of a country's economic health and not opinion, and is therefore immune to any attempt at influence.
6. No choice overload. There are over 8000 stock available to trade on the NASDAQ and NYSE alone - that's an awful lot of news to keep up with on a daily basis, and an awful lot of analysis to perform before you begin your next trade. Compare that to the FOREX market which, although it gives you access to dozens of different currencies, tends to focus on the four major currency pairs. This drastically reduces your research time and allows you to enter the market far more quickly.
7. Limited risk. FOREX traders must enable margin limits to mitigate risk. The trading platform of your choice will automatically issue a margin call if the margin amount required by your account exceeds the actual capital available in your account. What this means is that the most you can possibly lose is the money you have sitting in your FOREX trading account. With futures trading it is possible for a margin call to occur at a loss, leaving you liable for any amount not available in your account.
by Yusoff Allian
1. Trade 24 hours a day! With the possible exception of a few hours on the weekend, the FOREX market is open around the clock. Compare that to the stock market and the futures market which usually opens at 9:30am and closes at 4pm EST in North America. Due to the global nature of the FOREX market you're able to trade at your convenience, day or night.
2. No commissions. Tired of paying upwards of $30 per trade for a simple stock transaction? You don't have to worry about that when trading on the FOREX market. Your FOREX broker makes their money by taking the difference in price between the ask price and bid price for the currency being traded. This means no money out of your pocket.
3. Instant order fulfillment. A common complaint (and sad fact of life) when it comes to trading on the stock or futures market is that there is often a delay between when you place your order and when it actually gets filled. This can mean the difference between making a bundle and making nothing at all. Due to the incredibly high volume of transactions that occur daily on the FOREX market you can fill your orders instantly based on the real-time data you see on your trading platform. There can be occasions when the market is particularly volatile which can result in some minor delays, but for the most part you get what you see is what you pay for.
4. No middlemen. Unlike equity exchanges, FOREX traders can access the market maker directly without having to go through an intermediary first. This means that a FOREX trader can buy or sell directly from the entity that decides on the price for a given currency pair. Because an extra layer of communication has been eliminated, FOREX traders benefit from cheaper costs and gain quicker access to trades.
5. No unfair influence. We've all seen it on T.V. or read about it on the news - talking heads telling us to buy when a stock's price is plummeting, assuring us that everything will be alright in the end. The truth is that the only one that wins is the firm issuing that so-called advice while the average investor is left to lick his wounds. The FOREX market cannot be influenced by any one brokerage or person as it is representative of a country's economic health and not opinion, and is therefore immune to any attempt at influence.
6. No choice overload. There are over 8000 stock available to trade on the NASDAQ and NYSE alone - that's an awful lot of news to keep up with on a daily basis, and an awful lot of analysis to perform before you begin your next trade. Compare that to the FOREX market which, although it gives you access to dozens of different currencies, tends to focus on the four major currency pairs. This drastically reduces your research time and allows you to enter the market far more quickly.
7. Limited risk. FOREX traders must enable margin limits to mitigate risk. The trading platform of your choice will automatically issue a margin call if the margin amount required by your account exceeds the actual capital available in your account. What this means is that the most you can possibly lose is the money you have sitting in your FOREX trading account. With futures trading it is possible for a margin call to occur at a loss, leaving you liable for any amount not available in your account.
How To Choose The Best FOREX Broker For You
Thursday, March 19, 2009 FOREX Broker, Forex Killer, Forex Killer Strategy, forex market
How To Choose The Best FOREX Broker For You
by Yusoff Allian
Until recently it was a fairly simple process to figure out which FOREX broker was best for you as there were only a handful available. With the rise of the internet and the explosive growth of FOREX trading, the number of FOREX brokers has skyrocketed. It may seem overwhelming given the sheer number of FOREX brokers available to you, but by carrying out some simple research and doing your due diligence you will be able to pick a FOREX broker that's right for you.
It might be a good idea at this point to back up a bit and understand what a FOREX broker actually does. Basically, a FOREX broker is a person or group of people that carry out trades for an investor. The nice thing about using a FOREX broker is that they don't charge any commission per trade like you see with the stock market. Instead, FOREX brokers make their money by taking the difference between the bid price and the ask price of the currency. Be wary of brokers that take too much of that spread as their fee as it can affect your profit margin. Ideally you want a FOREX broker that charges 2-3 pip spreads, and definitely avoid any that charge anything higher than 5-pip spreads.
Probably the most important factor to look for when choosing a FOREX broker is whether or not they're regulated. Any U.S. based FOREX broker should be registered with the Commodity Futures Trading Commission (CFTC) and should also be a member of the National Futures Association (NFA).
You can visit the NFA's website at http://www.nfa.futures.org/basicnet and look up any FOREX broker you're interested in. Make sure you deal with a broker that has a clean record and has solid company financials. Any FOREX brokers that don't meet either of these criteria should be stricken off your list of candidates!
Customer service is an absolute must when deciding on a FOREX broker. The FOREX market never sleeps, meaning you can trade any time of the day or night. It's very important that any FOREX broker you choose have customer support staff that can be reached at any time, and provide assistance on very short notice. Take note of any positive testimonials on their site that reference the speed and reliability of their customer service, but also visit search engines and try to find other sources that may have written about their experiences with customer service. Good customer service can make a huge difference in your online experience with FOREX brokers, so it pays to do your research.
Find a FOREX broker that offers a trading platform you're comfortable with. The vast majority of brokers offer both web-based applications and downloadable applications. The web-based platform allows you to connect from any computer in the world that has internet access, but can be slower than its downloadable counterpart. The latter has speed on its side, but can only be run from the computer it's installed on. Whichever you choose, make sure the platform offers at least the basics, such as real-time quotes and up-to-date account information.
The criteria listed above are the essentials to choosing the right FOREX broker for you. Other services offered by the broker can be considered icing on the cake, but depending on your situation may also be viewed as critical to your decision making process. Some other factors you may want to consider are the minimum account opening deposit, timely execution of your orders and free charts and analysis.
by Yusoff Allian
Until recently it was a fairly simple process to figure out which FOREX broker was best for you as there were only a handful available. With the rise of the internet and the explosive growth of FOREX trading, the number of FOREX brokers has skyrocketed. It may seem overwhelming given the sheer number of FOREX brokers available to you, but by carrying out some simple research and doing your due diligence you will be able to pick a FOREX broker that's right for you.
It might be a good idea at this point to back up a bit and understand what a FOREX broker actually does. Basically, a FOREX broker is a person or group of people that carry out trades for an investor. The nice thing about using a FOREX broker is that they don't charge any commission per trade like you see with the stock market. Instead, FOREX brokers make their money by taking the difference between the bid price and the ask price of the currency. Be wary of brokers that take too much of that spread as their fee as it can affect your profit margin. Ideally you want a FOREX broker that charges 2-3 pip spreads, and definitely avoid any that charge anything higher than 5-pip spreads.
Probably the most important factor to look for when choosing a FOREX broker is whether or not they're regulated. Any U.S. based FOREX broker should be registered with the Commodity Futures Trading Commission (CFTC) and should also be a member of the National Futures Association (NFA).
You can visit the NFA's website at http://www.nfa.futures.org/basicnet and look up any FOREX broker you're interested in. Make sure you deal with a broker that has a clean record and has solid company financials. Any FOREX brokers that don't meet either of these criteria should be stricken off your list of candidates!
Customer service is an absolute must when deciding on a FOREX broker. The FOREX market never sleeps, meaning you can trade any time of the day or night. It's very important that any FOREX broker you choose have customer support staff that can be reached at any time, and provide assistance on very short notice. Take note of any positive testimonials on their site that reference the speed and reliability of their customer service, but also visit search engines and try to find other sources that may have written about their experiences with customer service. Good customer service can make a huge difference in your online experience with FOREX brokers, so it pays to do your research.
Find a FOREX broker that offers a trading platform you're comfortable with. The vast majority of brokers offer both web-based applications and downloadable applications. The web-based platform allows you to connect from any computer in the world that has internet access, but can be slower than its downloadable counterpart. The latter has speed on its side, but can only be run from the computer it's installed on. Whichever you choose, make sure the platform offers at least the basics, such as real-time quotes and up-to-date account information.
The criteria listed above are the essentials to choosing the right FOREX broker for you. Other services offered by the broker can be considered icing on the cake, but depending on your situation may also be viewed as critical to your decision making process. Some other factors you may want to consider are the minimum account opening deposit, timely execution of your orders and free charts and analysis.
Forex Killer Strategy - Join The Forex Trading Elite
Monday, March 2, 2009 Forex Killer Strategy, Forex Trading Elite
Forex Killer Strategy - Join The Forex Trading Elite
by Peter C Johnson
A true forex killer strategy will involve minimizing risk through the medium term trade, predicting trends and acting upon them with precise timing. If you can do all these things, you will be well on your way to becoming a forex killer. This is something new traders fail to realise- many use statistical data up to a point, but in the end base their trades on emotion and instinct- this is a sure-fire rote to failure in foreign exchange.
There is oftentimes bad press about the currency trading market- that by and large only the big players can really compete. Governments and large financial institutions such as banks do indeed make the majority of the profits, and have the greatest influence on market swings, however there are a lot of individual traders (spectators) who consistently make thousands of dollars trading foreign currency. It is not rocket science; however there are certainly some fundamentals that set them apart from those that fail.
Here are some key skills of the elite forex trader's
1) Favor The Medium Term Trade
It has been shown time and time again that by favoring the medium term trade you effectively minimize risk, and increase the chances of consistent profits. Think of it this way, you are better off making consistent small wins as opposed to large win's and large losses. As Justin Kuepper, contributor to Investopedia.com suggests favouring a medium term trade will “help you save money and ultimately become a profitable retail forex trader.
2) Predict Trends
Foreign exchange, unlike the stock market is a relatively small playing field (4 main currencies and 34 second tier currencies). The beauty of this is that it makes it easier and faster to interpret past market data and make educated decision's based on fact rather than instinct, There is no doubt that the most successful trader's use some form of forex trading software. Such platforms allow user's to efficiently read market signals and know when to act upon them for the greatest chance of profit, and the smallest amount of risk- this is effectively a true forex killer system. If you can efficiently manage the statistical data on the foreign exchange market, you are well on your way to success.
Click HERE To Learn More About The Unbelievable Forex Killer System
3) Act Upon Trends With Precise Timing
It is all good and well to have access to statistical data, but reading it and knowing when to buy and sell is another thing. Unless you are super experienced, again forex trading software will be the best place to start.
Conclusion
If you are serious about succeeding in currency trading, and being amongst the forex trading elite you need to favour medium term trades, be able to interpret and predict trends and act upon them with precise timing. If you can do these things, and ensure you never base a decision on emotion or instinct you will have the greatest chance of making massive profits in forex.
by Peter C Johnson
A true forex killer strategy will involve minimizing risk through the medium term trade, predicting trends and acting upon them with precise timing. If you can do all these things, you will be well on your way to becoming a forex killer. This is something new traders fail to realise- many use statistical data up to a point, but in the end base their trades on emotion and instinct- this is a sure-fire rote to failure in foreign exchange.
There is oftentimes bad press about the currency trading market- that by and large only the big players can really compete. Governments and large financial institutions such as banks do indeed make the majority of the profits, and have the greatest influence on market swings, however there are a lot of individual traders (spectators) who consistently make thousands of dollars trading foreign currency. It is not rocket science; however there are certainly some fundamentals that set them apart from those that fail.
Here are some key skills of the elite forex trader's
1) Favor The Medium Term Trade
It has been shown time and time again that by favoring the medium term trade you effectively minimize risk, and increase the chances of consistent profits. Think of it this way, you are better off making consistent small wins as opposed to large win's and large losses. As Justin Kuepper, contributor to Investopedia.com suggests favouring a medium term trade will “help you save money and ultimately become a profitable retail forex trader.
2) Predict Trends
Foreign exchange, unlike the stock market is a relatively small playing field (4 main currencies and 34 second tier currencies). The beauty of this is that it makes it easier and faster to interpret past market data and make educated decision's based on fact rather than instinct, There is no doubt that the most successful trader's use some form of forex trading software. Such platforms allow user's to efficiently read market signals and know when to act upon them for the greatest chance of profit, and the smallest amount of risk- this is effectively a true forex killer system. If you can efficiently manage the statistical data on the foreign exchange market, you are well on your way to success.
Click HERE To Learn More About The Unbelievable Forex Killer System
3) Act Upon Trends With Precise Timing
It is all good and well to have access to statistical data, but reading it and knowing when to buy and sell is another thing. Unless you are super experienced, again forex trading software will be the best place to start.
Conclusion
If you are serious about succeeding in currency trading, and being amongst the forex trading elite you need to favour medium term trades, be able to interpret and predict trends and act upon them with precise timing. If you can do these things, and ensure you never base a decision on emotion or instinct you will have the greatest chance of making massive profits in forex.
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