The Thing I hate About Trading Systems

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This is just a quick rant really.

I was just looking at some possible trading concepts to put on the site and I came across one that claimed to be not like all the rest out there. And said

“…but I’m sure like me, you’re probably sick of those unbelievable
claims from the self-proclaimed forex ‘gurus’… You know, promises of
1000 pips a day… trillions of dollars overnight…”

Obviously they are going for the “honest” marketer approach. Which I don’t mind….if they are honest and not just covering over the cracks.

It sort of reminds me of the change between the use of the the “diet” when refering to losing weight. A decade or so ago…the word “diet” was the new best thing. But that quickly turned to “diet” is a dirty word…they don’t work…you need a life plan. But ultimately diet or life plan, there were very little difference between the two schools of thought. Just
clever marketing.

Anyway, back to this trading method. They go to great lengths to tell you they are not like the rest and then they go and put a chart up like this.

The issue I have is two fold. Firstly, the exit point. They mark the exit point where the two MAs crossover. Obviously as the system uses a crossover to exit this makes sense to a degree. However, the crossover would not occur until the period has closed and this would not have occured until the period after their “exit mark”. The actual exit would occur in the area marked in the blue circle.

The second thing that annoys me is that this concept is based on 1 hr chart. So between entry and exit there are about 48hrs worth of data. How on earth are you going to watch the market for the various exit criteria for 48hrs non-stop. It’s not practical. Okay, I know one could program the exit for autotrading but this is not what this publication was aimed at.

These are two very common traits found in internet marketed trading systems found on a basic google search. And unfortunately they get away with it. Just make sure you watch out for them. And if you had paid money for such a system, even if only a few dollars. Stand strong and ask for it back. A system is not a system unless it can be traded in a real and practical way. Everything else just looks good on paper.


2 Responses

  1. Roger says:

    Hi, here are some easy to memorize tips that will help you to make smart pivot point trading decisions: 1) If price at PP, watch for a move back to R1 or S1. 2) If price is at R1, expect a move to R2 or back towards PP. 3) If price is at S1, expect a move to S2 or back towards PP. 4) If price is at R2, expect a move to R3 or back towards R1. 5) If price is at S2, expect a move to S3 or back towards S1. 6) If there is no significant news to influence the market, price will usually move from to S1 or R1. 7) If there is significant news to influence the market price may go straight through R1 or S1 and reach R2 or S2 and even R3 or S3. Roger.

  2. Jason says:

    LOL so you reckon if price is at say at one level you expect it to either go to the level above or the level below?

    mmmmm? Got somestuff to learn I think Roger. Better stick around.

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