Can You Learn to Trade Forex Using Free Forex Trading Systems?
November 19, 2009 by Forex Admin
Filed under Featured Forex Articles, Forex Trading System, Learn Forex Trading
Can you really learn to trade Forex using free Forex trading systems? The answer is yes you can. Just because a Forex trading system is being sold commercially does not mean that it works any better than free systems you may find available.
Most likely free Forex trading systems are just basic and most often used as examples of Forex trading systems. The fact that it is a simple and basic system makes it excellent trading system to learn from.
You can run a free Forex trading system on a demo account. This creates an outstanding learning environment for a beginning Forex trader. You can observe how the system performs through a wide variety of varying market conditions. Just this observation itself can tell you a lot. If for instance, the system seems to do well in up markets and down markets, but poorly in sideways markets, then you know the system follows the trend. This type of system is called a trend following system.
One nice thing about some free Forex trading systems is that they are actually developed by experienced traders. Some experienced traders or more than happy to share their knowledge with those just starting out and make these systems freely available.
One important note here is that while it’s fine to learn to trade Forex using free Forex trading systems you don’t want to simply jump from freebie to freebie without building on your Forex education.
sometimes totally useless systems are hyped and sold at a high price – adding the purchase price to your loss (adding insult to injury…) Simple systems work better because they are easy to follow and easy to understand – complexity leaves the door open to “tweaking” some “ingredients” of the so called system – this tampering will eat away your time, leave you more and more perplexed – an in the end, broke. Try something simple: Open position on 10 period low/high with a 5 period stop. Dont be fooled even the most simple systems become difficult to follow during periods of losses. It could well be that you are stopped 10 times with losses before making a profit – not many people have the discipline to stick to a system, of any kind, be it simple or complex, for extended periods of time. The described system would fit into the trend following approach, guaranteeing practically, that you will in all the major trends. And that percisely is the key to profit, which in these trends, can be so substantial, recouperating all previous losses, which are small in comparison to the homeruns, but you must be able to stick out your plan, no matter what. Very few can…You may want to listen to Ed Seykotas song “…one good trend pays for them all….” http://www.youtube.com/watch?v=LiE1VgWdcQM