Forex Day Trading Systems - They ALL lose ....

Forex Day Trading Systems - They ALL lose Because Their Curve Fitted by Kelly Price

Forex day trading systems are big business but the fact is they all lose, because their all curve fitted. If you don't know what curve fitting is and you are considering a forex day trading system, read on.

Let's start with some basic facts in relation to forex trading:

Millions of different people, all trading differently, trading trillions of dollars all contribute to the price and to say you can predict what this mass, diverse group of people can do in under a day is ridiculous.

All short term support and resistance is meaningless, as volatility is random within daily time frames, therefore you cannot use these levels to trade off.

Day trading sounds great making huge profits with low risk but the reality is a constant erosion of equity and a loss.

Why The Track Records You See are Flawed

You always see track records that make money but the catch is these systems have never been traded.

What the vendor does is curve fit the system (bend it to fit the data) they do this in hindsight on data and simply make it fit. The system then fails because no two pieces of data replicate themselves exactly.

One trader I know likened this to shooting at a barn door blindly and then drawing a circle around every shot, to make it look like a bulls-eye.

It's done in hindsight and it's easy to make money when you can bend your system to make a profit. Most day trading systems use the following CFTC disclaimer:

"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 put the above on and you can say anything you like with regard to a track record and vendors do and you see forex scalping and day trading systems that make huge claims that never stand up in real time trading.

You will never find a real time track record of forex profits, with supporting account statements over the longer term.

Day trading appeals to naïve and greedy traders, who think forex Trading is easy but of course they soon get a reality check when they trade - a wipeout of equity.

UNLDERSTAND THIS

If you trade any market not just forex you need to use reliable data and this means using longer time frames to trade, where you can get the odds in your favor.

This means swing trading short term moves of a few days to around a week or trading longer term moves that last for weeks or months.

Both methods of trading have their merits and you can make money with them both which is more than can be said for forex day trading.

If you want to enjoy currency trading success trade valid data and trade the odds - it really is that simple.