Forex Scalping Systems - Beware of Curve Fitting or Lose!

Forex Scalping Systems - Beware of Curve Fitting or Lose!

by kelly Price

Forex scalping systems are more popular than ever and they all come with great track records, which have unbelievable gains and their very tempting for novice traders but what they need to be aware of is - curve fitting which ensures that most scalping systems lose money.

Curve fitting is when a vendor bends his system to fit the data.

When the vendor can't get the system to work, he keeps adding more rules and parameters in until it does, by bending the system to fit the data or curve fitting. He then has a track record he is satisfied with or more to the point gives him a great track record he can sell.

What happens next?

No two periods of data are going to exactly replicate themselves and the system simply collapses and loses in real time trading.

LOOK FOR THIS DISCLAIMER!

The buyer scratches his head and wonders why - but if he looked for this on the track record he can find out if its curve fitted. Look for the disclaimer below (or similar) on any system you buy - this is standard CFTC one.

"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".

If you are looking at buying a forex scalping system from a vendor, beware there all curve fitted.

You will NEVER find one with a real time track record, as forex scalping simply doesn't work by the very nature of the logic its based upon.

The time period is simply to short.

All volatility in daily or hourly time frames is random - support and resistance is meaningless and prices can and do go anywhere in a day. It's impossible to get the odds in your favor and forex day traders always lose long term.

Of course it makes a good story and naïve and greedy traders buy it and vendors know this.

They simply tell the story add a simulated track record and appeal to their greed - it's a big industry.

If you want to trade forget forex, forget scalping systems or day trading and trade longer time periods, where you can get the odds in your favor.

Leave forex scalping systems to the dreamers and greedy traders, get the right forex education and enjoy currency trading success by using longer time frames and valid data.

Forex Trading - Answer This Simple Question Correctly or Lose!

Forex Trading - Answer This Simple Question Correctly or Lose!

by kelly Price

So you want to win at forex trading? Well here is one simple question you must answer correctly with no hesitation - if you can you could be a winner if not forget forex trading. Here is your question:

My trading edge (the reason I will win when 95% of traders lose) is then define it:

Now a trading edge is essential and it's something you MUST have, understand what and why it gives you an edge, so you have confidence in it, to lead you to success.

Trading edges come from within and their personal and their based upon this:

Understanding = Confidence = Discipline = Forex success

A TRADING EDGE IS NOT

- Following expert news stories - Day trading or scalping - Following a system from a vendor blindly - Buying low and selling high - Predicting price moves in advance - Believing markets move to a scientific theory - Believing forex trading is easy - The more knowledge you have the better - The more complicated your forex trading system the better

If you think any of the above will lead you to currency trading success - your wrong and need to continue your fore education. The above are common myths there are many more but the above are believed by the bulk of losers and their the majority 95%

Consider the figure 95% it's a lot!

So how do you win?

There are no secrets to forex trading and anyone can learn currency exchange for profit but it involves seeing through the myths and working smart and seeing the reality.

The reality is that you need a simple method you understand can have confidence in and can apply with discipline.

Forex trading is actually quite simple when you understand what you need to do but most traders fail to get past first base of getting a logical method and more fail at the nest hurdles which is having confidence and few ever have the discipline to follow their forex trading strategy to success.

If you want to win at forex trading keep in mind it's based upon applying a method with discipline for that you need confidence and if you don't have these traits you won't have discipline and end up falling prey to your emotions and losing

The Good News Is:

For those traders prepared to work smart and do their homework a life changing income can be had and anyone can do it - but its up to you.

If you understand the above you will realize that forex trading requires certain skills and you need to learn and apply them and they are not what most forex traders think they are.

Learn the above, digest it get a trading edge and then you can enjoy currency trading success.