There are lots of mechanical forex robots you can choose from and most of the sold ones lose yet, you can get one which is free and will out perform them and its free and even better it's simple to understand and use so you can soon be seeking currency trading success with it...

The forex robot we are going to look at here is a simple system that has been around for over 20 years and has been the basis of many a successful trading system - its extremely simple, yet continually makes money year, after year and is based on timeless logic

Background

The system was developed to trade commodities in the late seventies by trading legend Richard Donchian, who is considered the grandfather of modern trend following and was developed to trade commodity markets. It can in fact be used on any trending market and forex markets, with there excellent trends make it an ideal one to use this system on.

The Rule

This system only has one basic trading rule so here it is:

Close any short positions and go long whenever the price exceeds the highs of the previous 4 calendar weeks and reverse again and close any long positions and go short when the price falls below the lows of the previous 4 weeks. This system maintains a position in the market all the time and is a SAR (stop and reverse) system.

Well you can't get much simpler than that - but don't be deceived by its simplicity, it works and here's why:

Why it Works

Currencies trend longer term and most of the big trends start from breakouts. The above is a long term trend following system and will put you on the side of every major trend.

Do not be deceived by the fact its simple - judge it on the basis of how much money it makes

It continually makes great gains and its simplicity is part of its power.

All the best forex trading systems are simple, as they have fewer elements to break in the real world of trading.

There is no link between complexity and currency trading success - simple systems work and you can easily find out by testing it.

What is the Downside?

All currency trading systems have them and this one is no exception. When markets don't trend of course, you will take losses but you can smooth the equity curve by adding a filter - simply exit on a 1 or 2 week stop and remain flat until the next 4 week signal. You can also use a moving average if you wish.

Which ever route you take the system will make money it just depends on your drawdown tolerance.

Why it Works and most traders won't Use it

Many traders despite the evidence it makes money, will dismiss it as too simple ( you don't even need a computer program to calculate it) and many still feel "safer" using a more complicated system, even thought this one will beat almost all forex robots sold. Sure, there more complex and come with a flash presentation but check there track records - there just simulations in the past and have never made real money - this one has and will continue to make money.

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