| Today the computer you have on your desk is much | | | | bending the rules of the trading system to fit the data. |
| more powerful than Mission Control Houston that | | | | When the first rules don't work the trader simply bends |
| helped man land on the moon. Powerful computers | | | | them until they do. This is a bit like shooting at door |
| have changed our lives for the better and here we will | | | | with a shotgun and then after the event, drawing a |
| look at their affect in forex trading and the application | | | | chalk circle around each one to make it a bulls-eye! |
| of forex trading systems by traders for profit. | | | | Keep in mind that any segment of data is going to be |
| So how useful are computers in forex trading? | | | | different as the markets are not scientific in terms of |
| The role of computers is very often misunderstood by | | | | their movement so the appliance of science is of |
| forex traders. | | | | limited use. |
| Computers have enhanced our lives in many areas | | | | The above mistakes are often made in tandem and |
| and help us solve complicated problems there is the | | | | complexity or trying to be clever testing data and |
| belief forex trading systems can be created to trade | | | | bending a system won't help you make money. |
| forex markets automatically. | | | | Here is another startling fact: |
| There are a number of forex trading systems for sale | | | | 50 years ago 95% of traders lost and today the ratio |
| that promise to do just that - and most of them fail. | | | | remains the same - this is despite all the advances in |
| There are two reasons for this failure: | | | | computers forecasting and market data retrieval. It's |
| 1. The System is to Complicated | | | | pretty clear that the application of computers has |
| Its tempting to make a system complicated and many | | | | made no real difference to the success of traders. |
| traders do they figure the more elements it contains | | | | Many traders think the application of science and |
| the better its chances of success however the | | | | computers can help in all areas of life and in many |
| complete reverse is true. | | | | they can but in forex markets this is not so. |
| The more rules and parameters you cram into a | | | | Computers make your life easier but they cannot be |
| trading system the more elements there are to break | | | | relied upon to give you success. |
| in the brutal ever changing markets - it's a fact simple | | | | Just as in the past a simple system will beat a |
| systems work best as they are more robust and this | | | | complicated one and that is never going to change as |
| has always been so. | | | | forex is a game of odds not certainties. |
| 2. Curve fitting | | | | Yes computers are helpful but the real key to trading |
| Many systems that fail in real time trading actually | | | | is finding a simple forex trading system, understanding |
| work in hindsight when their tested on data and the | | | | it and applying it with discipline. |
| reason for this is curve fitting. Curve fitting is simply | | | | |