There all over the net currency trading systems promising you huge gains but very few deliver anything but losses. The track record looks great but the real results don't live up to the hype - Why? The answer lies in curve fitting, understand it or lose.
First of all most of the track records you see on the net are simply simulations done in hindsight KNOWING The closing prices and you can check by looking for the disclaimer below or similar one - read it carefully:
"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".
So vendors can make up anything they want providing they put this or similar disclaimer on the currency trading system their promoting.
When system traders do these simulations when their initial rules don't work, they start to bend them to fit the data - until they do. A trader I once knew said this was like taking shots at a barn door and afterwards drawing circles around them to make everyone a bulls-eye.
As no two pieces of data are exactly alike the system collapses in real time trading.
If you are buying a currency trading system then if you can look for a real time track record - if you want to buy a simulation you can but just check if its curve fitted here's how:
Clues to curve fitted system are:
- To many rules i.e a trading system that's simply to complicated. - Has unique rules for different currencies. - Has unique rules for different trading conditions. - Huge profits with little or no drawdown.
You can buy a simulation but make sure you know the logic the system is based on and the rules are fully disclosed.
Buying a currency trading system is really common sense and if it looks to good then it probably is. Today anyone can sell online and most of the systems sold are simply there to appeal to the naοve and greedy trader and vendors know this.
Be careful when buying a currency trading system and look for one that is NOT curve fitted or you will lose.
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