Popular Forex Trading Startegies That You Should Avoid
Posted in Forex Trading Strategies on 26. Mar, 2010
There are countless numbers of forex trading strategies out in the web. We will be discussing about a few popular ones that seem to work, but actually don’t. They don’t work because they are based on flawed logic.
These strategies are usually sold on websites selling you on the dream of making tons of money if you just follow the secrets they sell to you. Why would they do that if it was making them money? It’s because they don’t work as well as they told you.
These strategies are constantly being used by beginner traders thinking that they have the secret strategy that will catapult them into the millionaire club overnight. The first one is the cheap forex robots being sold everywhere.
The claims for these robots is that the creators spent hundreds of thousands of dollars trying to develop the software. And they even have hundreds of days worth of backtesting which generated tons of money. It would be foolish to get tricked by backtesting claims.
The backtesting can be done by going back to the history and altering them. They are telling you that they can predict the future, which is a lie. Stay away from forex robots.
The second strategy to stay away from is the fibonacci systems. Although Fibonacci was an awesome thinker, his mathematical formula was just to solve a problem with the copulation of rabbits. I’m sure he would be surprised that people are using his formula in forex trading if he were still alive today. Most people are duped into believing this strategy because it has that magical and mysterious affect. And who wouldn’t believe a formula based on a legend’s name?
Lastly is the strategy called intraday trading and scalping. Before the broker companies came online, price information was only obtainable by a few experts. Nowadays, it’s available to everyone up to every tick. People think that doing intraday trades are a great way to make money through forex trading. In fact, it is a lot of work sitting in front of the computer for hours, monitoring a currency pair and make decision to buy or sell them.
Markets can’t be predicted and cannot be calculated by formulas, all you need to understand is the market psychology and take advantage of it to make gains.
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