Forex Trading System - A Free System You Can Use Right Now For Forex Success
Here we are going to give you a free forex system which can help you enjoy success. We will reveal how and why it works in full and it won't cost you a dime, so here it is.
This system is a simple forex trading system which has been around for nearly 30 years, and has been used by numerous traders and its piled up big long term profits. It was devised by Richard Donchian a legendary trader considered the grandfather of modern trend following and while simple, trading superstars such as Richard Dennis was a huge fan of the system.
Let's look at how and why it works and the rules of the system.
The System Rule
This system is incredibly simple it only has one rule and its:
Buy a four week high in any currency and sell a four week low and maintain a constant position in the market using a stop and reverse strategy.
That's it!
One rule ( although in a moment we will give you filter) and you cant get much simpler than the above - but don't think its to simple to work, it does and is based on the following logic.
The System Logic
Markets trend and will continue to trend and these trends will last for many months or years
1. Most new trends start and continue from new market highs or lows
2. The system is simple making it very robust in the face of volatile but trending markets
3. Simple systems always work best as they are more robust than complicated ones and have fewer elements to break - all the best currency trading systems are simple.
Weakness of the System & a Filter
It's a trend following system so when market are not trending it can generate false signals that lead to losses. This is where you can add a filter. You can exit a position on a one or two week rule go flat and wait for the next 4 week signal to get back in the market. You can also exit on short term moving averages.
The above will smooth the equity curve of the system.
Why Most Traders Won't Use This System
It makes money and its easy to test it out for yourself and see this - but most traders wont bother with it, despite the fact it makes money, here's why:
1. It is totally objective in generating signals and most traders can't follow signals
2. It isn't bothered about pinpoint market timing even though you can't sell highs or buy lows traders like to try!
3. It doesn't trade often so doesn't suit the action man and you need to have patience
4. It doesn't have a catchy name or based on flavor of the month logic such as - neural networks, chaos theory, etc
Of course none of the above will bother the trader who simply wants to make money and the fact its simple, doesn't mean it won't beat any of the so called complicated trading systems, or the forex robots sold with their simulated track records, it will but it isn't trendy is it?
Hwever being trendy is not a criteria the serious trader cares about who wants to make money.
This one has walked the walk and made money.
Sure its simple, but try it yourself and you will surprised at how effective it can be. You may want to play around with the filter a bit to tailor it to your risk reward but it's a sound system, that works and will continue to work and its free - so test it out.
