Automated Trading Systems

Automated trading systems have become extremely popular with Forex traders. Before we dive into the basics of automated trading systems let’s define what it is. An automated trading system is trading software which will and exit points for trades. Not only will it select the entry and exit points it will execute trades on the trader’s behalf without the traders intervention.

There are those who like and those who dislike automated trading systems for a variety of reasons. Longer-term traders haven’t really found a good reason to use any type of automation as their entries and exits are relatively infrequent and can be entered manually quite easily. Short-term traders such as swing traders, daytraders, and Forex scalpers may find automating their trading strategies to their liking. If, for instance there is a trading strategy that enters and exits numerous times during the day, then in automated Forex system may be the correct choice for that type of trader.

Technology and automation are wonderful things when used correctly. They can certainly make the lives of the trader much, much easier and allow us all to trade more efficiently and effectively.

There’s a challenge with automation, however. It is really quite simple. An automated system is only as good as the system and automates. In other words automating a bad trading system will only allow you to lose money automatically and hands-free fashion. Although that statement is obvious, a surprising number of people still allow automated systems to trade their account without understanding how the system works.

One of the biggest dangers of automated trading systems is that these days they are very easy to produce. Their software available that allows you to create an automated trading system as well as back test that system. Unfortunately, many who venture out to create their own systems either for themselves or for sale to others have not learned how to properly evaluate a Forex trading system. Quite logically, not knowing how to evaluate a trading system doesn’t really leave you in a good position to create one that will work. With that said, it is important to learn to evaluate trading systems prior to creating your own.

If you are inclined created an automated trading system the first thing you’ll need to do is to learn how to create a robust trading system. That will, of course, include learning how to evaluate trading systems. By learning how to evaluate trading systems you will learn to create and choose those systems which are best suited for you.

An Introduction to Forex Technical Analysis

One of the most popular ways for individual Forex traders to analyze the Forex markets is using Forex technical analysis. Technical analysts work on the concept that as the market digests economic news, world events, and other data that it becomes reflected in the price.

Technical analysts use combinations of price, time, and or volume in their trading research.  This type of analysis has become increasingly popular especially with the ready availability of Forex market data and the increased processing capabilities of personal computers.

Often times in technical analysis Forex traders will start by looking at a Forex chart.  Forex charts allow traders to see how past prices relate to one another. This “perspective” allows traders to visually identify price trends.  The objective of looking at these price trends is to find patterns in price data that are likely to repeat themselves in the future.  If you can find price patterns with a good probability of repeating themselves, then you may have a good chance at developing a profitable Forex trading strategy based upon those patterns.

The use of charts in Forex technical analysis also allows for the use of technical indicators.  Indicators are named as such because they “indicate” when a price has met a particular criteria.  Technical indicators are shown on Forex charts right along with the price data.  They can come in the form of dots, dashes, lines, etc. all in the variety of different colors.

Here are some examples of some indicators commonly used in Forex technical analysis:

Moving average —  The moving average is probably one of the most commonly used Forex technical indicators.  Moving averages come in a variety of forms such as simple, weighted, and exponential.  In its simplest form a moving average simply take the last X number of prices add them together and then divides them by X. The average is called “moving” because it changes with time.  If we are looking at a daily moving average as an example the average will change with each new trading day.  Here’s a quick example of a simple 5 day moving average:

Day 1 = 1.41140
Day 2 = 1.40770
Day 3 = 1.40390
Day 4 = 1.39650
Day 5 = 1.38910
Total  = 7.00860

7.00860/Number of Periods (Days) 5 = Moving Average = 1.40172

As you can see from this example in the prices from day 1 to day 5 were moving in a downward direction.  This means that the moving average line is also sloping downward.  We can see from our example that the price on day five is less than the moving average.  The typical interpretation of this is that the market is currently in a downtrend based upon this moving average.

Stochastic oscillator – While the moving average is typically used to measure the momentum of trends and the stochastic oscillator is typically used to indicate periods of trend exhaustion.  The values of the stochastic oscillator are between 0 and 100.

A Forex market is said to be in overbought (uptrend losing momentum) territory when the stochastic oscillator is above 80. A Forex market is said to be an oversold (downtrend losing momentum) territory when the stochastic is below 20.

With a basic introduction to Forex technical analysis you can instantly see how useful this can be in your own trading research.  Our moving average and stochastic oscillator examples are just that, and examples only.  In your own trading research you will want to experiment with a variety of parameters for these and other technical trading indicators as well.  It is been proven by successful traders the world over that technical analysis can be used to trade Forex very profitably.  Learning the ins and outs of technical analysis can definitely put you on the path to successful Forex trading.

The Basics of Forex Day Trading

Forex day trading has become the rule rather than the exception these days. Many traders are looking to grab quick profits early in the trading session and go on with the rest of their day.

To day trade Forex you must simply open and close a trade all within the same day. If you ask why people would want to day trade Forex you would hear a variety of reasons.

Many traders feel that they can reduce their risk by not having trading positions open overnight. These traders feel that there is the potential that some event may take place which will have a negative affect on their trading position. If they close out all their trades by the end of the day then they can eliminate their exposure to overnight events or news of any kind.

The popularity of day trading and other short-term trading methods increased as real-time Forex data and faster, more efficient online trading platforms became available. Day trading has also grown to be a controversial topic. Many more conservative traders consider it to be nothing more than gambling while other claim that it’s the greatest thing since sliced bread. Whatever opinions people have about day trading there are traders who do it successfully.

Here are a few things to keep in mind if you are planning on day trading:

Transaction Costs – The transaction costs in Forex trading is the size of the spread. The spread is how your Forex broker gets paid. Quite logically, the smaller the spread the better it is for the trader. You may ask, “What does this have to with Forex day trading?”. Good question. Since day traders typically trade more frequently it stand to reason that their transactions cost will start to add up. Here’s a quick example:

Longer-Term Trader – – Spread = 3 pips X 6 trades per year = 18 pips per year transaction costs

Day Trader – – Spread = 3 pips X 150 trades per year = 450 pips per year transaction costs

If everything else is equal for the above 2 traders it’s easy to see that the day trader’s transaction costs are a much larger percentage of their profits.

The moral of the story here is that if you do day trade make certain that your Forex trading system will yield a profit AFTER all transactions costs.

Forex day trading can be incredibly profitable. As long as your trading method can make a profit after transaction cost over and over again you will be well on your way to being a successful Forex day trader.

Forex Trading For Beginners

Let’s cover some easy Forex trading for beginners. Although I know there are many beginners who are starting out who like to trade in the shorter time frames, trading on a longer time frame gives you more time to react. With a longer time frame you don’t have to be that nimble and quick as a more experienced trader.

If you’re just starting out in Forex trading you are most likely very anxious to get started. At this point, of course, it makes perfect sense for you to learn to trade Forex properly prior to investing your capital. This Forex trading for beginners video is designed to give you an introduction to some of the easy Forex strategies for beginners. Watch the video and use it as a reference guide and look for similar patterns on your own charts. What you’ll find is that many price patterns in Forex repeat themselves again and again and again. This is not to say that those price patterns will always lead to positive trades. There is always be profit potential in finding those price patterns which have the highest probability of future success.

In the video above pay particularly close attention to the discussion of risk levels. The level of risk you take will depend on a number of factors such as your account size and your trading system. Keeping your risk/reward ratio under control will not only help you preserve your capital for future trading opportunities, but will allow a profitable Forex system to flourish. Controlling your risk is a standard practice among successful traders, whereas not controlling risk is the most standard practice among non-successful traders.

In our example Forex tutorial video we are exploring a simple channel breakout system using the EURUSD daily chart. The channel breakout system can be highly effective when used on different currency pairs as well as different time frames. So as you gain more experience and advance from a beginner to an intermediate Forex trader, you may wish to look at using a simple channel breakout strategy for shorter term trading.

The Importance of Forex Trading Systems

Clearly nothing is more important Forex trading than having a profitable Forex trading system.

All a Forex trading system does is tell you when to get into a trade and when to get out of the trade. Often times you hear trading systems referred to as “mechanical trading systems”. You will also hear them referred to as Forex robots or Forex expert advisors. They are referred to as robots because of the mechanical, unemotional way in which they work.

Technical analysis is the basis for most all trading systems. Naturally the metrics of fundamental analysis can also be numerically quantified and can be analyzed using mathematical methods.

There’s so much software available now that allows traders to analyze the markets as well as to create their own trading systems. Forex brokers now have platforms that integrate well with trading system development software, making it even easier for those traders who wish to completely automate their trading system efforts.

So how does one get hold of a trading system? There are several routes you can go, you can either buy an already created trading system from someone else, or you can create your own. Obviously, buying a trading system would seem like the easiest choice, especially for beginner. That’s partially true, because creating trading systems does require a certain level of skill. Let’s phrase it another way, creating trading systems that work requires a certain level of skill. In reality, anyone can throw together a trading system and hope for the best. Alarmingly, this is what far too many beginning traders actually put into practice.

There are a number of reasons why you should use a trading system in order to be successful in Forex. The first one is obvious because a good trading system will actually make you money over the long term. Since the trading system is mechanical and unemotional in nature it definitely helps traders not second-guess themselves, especially when in the heat of trading. By removing the guess work and the emotional component trading systems are able to assist a trader and maintaining their trading discipline.

Whether you choose to purchase commercially available trading system or to build your own from scratch you’ll need to know how to evaluate trading systems. If you don’t know how to evaluate trading system how can you tell if it is likely to work well into the future. The truth is that nobody can predict the future and that even real time, real money, track records are still merely footprints. This is why you’ll see the disclaimer, “past results are no guarantee of future performance”.

Choosing A Forex Trading System – Things Every Beginning Forex Trader Needs To Know

There are many different kind kinds of Forex trading systems. Of course, the most important Forex trading system is the one that is right for you.

As you search the web for Forex trading systems suitable to you there will be many seemingly appealing offers many promising to be so much better than the rest.

It can be difficult to compare some Forex trading systems due to the lack of performance information. You want to have enough information available to you for you to be able to make an intelligent decision. You need this valuable information prior to committing to purchase or lease a Forex trading system and before committing to the money necessary to properly fund a trading account.

Here are a few quick tips to help you hack your way through the jungle of available Forex trading systems:

Ignore the testimonials

Your first job is to ignore the typically glowing testimonials telling you how great a certain Forex trading system is. Remember that these are most likely not typical results obtained with the trading system.

Now I’m not suggesting that you ignore all testimonials about all products. I’m simply suggesting that when it comes to testimonials about money making strategies that we all need to be more objective.

Don’t forget that a testimonial about a vacuum cleaner is a lot different that a testimonial about t trading system. For one thing everyone knows how a vacuum cleaner works and what it is supposed to do. Not everyone knows what a Forex trading system is and how it is supposed to work.

Not looking at the testimonials will allow you to be more objective in your evaluation.

Also keep in mind that it is highly unlikely that you will buy your own private island based the few great trades you see in the testimonials.

Let’s take a look at a few other do’s and don’ts for choosing a Forex trading system. With that in mind here is “don’t” number 1.

Don’t be overly impressed by a high percentage of winning trades

Often times you will see Forex trading systems advertising a high winning trade percentage. The ad might contain information a line like the following: “Over 90% Winning Trades”

You might look at that and say, “Wow, with numbers like that I’ll be rich in no time!” Before you stop reading the ad to call your local real estate broker about buying that private island just realize that this one figure does not tell the whole story.

The fact is that most successful traders the world over have made their money with far smaller percentages of winners than many of the trading systems you will see advertised.

I would suspect that the reason the high winning percentages are advertised is to attract as many customers as possible. Many buyers believe that the closer the winning percentage is to 100% the closer the trading system is to being a “sure thing”. In the trading world there is no such thing and you would be well advised to run as fast as you can away from anyone who tells you otherwise.

Here’s a quick illustration of a losing trading system with a high percentage of winning trades:

Trading System A Performance

Number of trades = 1000

% of Winning trades = 92%

% of Losing trades = 8%

Average Winning trade = $180

Average Losing Trade =  -$2100

That’s just a quick illustration of how a Forex trading system can have a high percentage of winners and still lose money. We’ll go into even more depth in the next part of our series as we continue to explore choosing a Forex trading system.

The whole point of the exercise was to get you to take a closer look at the performance results of trading systems that you are interested in pursuing. Now that you know that it is possible to lose money trading a system with over 90% winners, you’ll be able to look at the next advertisement for a Forex trading system much more objectively.

Let’s take another look at our example:

Trading System A Performance

Number of trades = 1000

% of Winning trades = 92%

% of Losing trades = 8%

Average Winning trade = $180

Average Losing Trade =  -$2100

A few quick calculations tells us that this trading system had Total Net Profit of -$2,400

The Total Net Profit is an important factor in any trading system although it doesn’t tell the full story.

Here’s how the Total Net Profit is calculated:

Total Net Profit = Gross Profit – Gross Loss

In our example above these figures would be:

$165,600 – $168,000 = -$2,400

As stated above the Total Net Profit for this trading system is negative. This is important to note. As you can see, if the only information you originally had access to was the percentage of winning trades you would have started to trade a losing trading system. Now with a little more information such as the Total Net Profit we are clearly able to see that all the glitters is not gold.

Please note that it is unlikely that anyone would be openly advertising the fact that even though their trading system has a high percentage of winning trades that it is a losing system.

In the next part of our series we’re going to take the performance data we currently have at our disposal and generate a very important number to know in evaluating any trading system.

I promised you previously that we were going to “generate a very important number in evaluating any trading system”. Well now I’ll make good on that promise. This very important measurement is called the Profit Factor

The calculation of the profit factor is quick and easy:

Gross Profit =$165,600/Gross Loss=-$168,000 = 0.9857

Unfortunately for this trading system the profit factor is not attractive. A profit factor of 1 means that the trading system just breaks even. Any profit factor below 1 indicates a losing trading system. In other words our example trading system would not be worth trading.

Can you tell me how good a trading system would be based on the following simple calculation:

Gross Profit =$1,000,000/Gross Loss=-$1,000,000 = 1

So how good would that trading system be? After all it is showing a million dollar gross profit. If you answered that a trading system with a profit factor of 1 would not be appealing you would be correct.

Even though the million dollar trading system has tremendous profits it also has tremendous losses. Basically this is a break-even trading system. If you ask “What’s the point of trading a break-even trading system?” the answer would be “none. There is no point in trading a system that breaks even. The money in your mattress can break even without any of the risks associated.

We want a trading system with a profit factor great than 1 because that would indicate that we have positive net profit. Some people refer to a trading system with a positive net profit as a system with a positive mathematical expectation. Either way you put it the Profit Factor is a valuable measure for any trading system.

You don’t want to miss the next part in this series. Next up is some information that you positively must know before putting your hard-earned money and time into any Forex trading system.

No discussion of trading system evaluation would be complete without a discussion of drawdown.  We must always look at the maximum drawdown of any trading system as it is very, very important.

The maximum drawdown of trading system is defined as the greatest peak-to-valley drawdown in a trading system’s equity.  Let’s say for example that we have a trading system that reaches a particular equity peak of $100,000.  Let’s further say that two weeks later, the trading system equity is at $80,000.  In this example, let’s say that the $80,000 equity happens to be an equity valley.  In that case, the peak-to-valley drawdown would be $100,000-$80,000 equals $20,000.  This means that the maximum drawdown is $20,000.

So why is the maximum drawdown such an important measurement in our evaluation of a trading system? It’s because the maximum drawdown gives us a measure of the survivability of the trading system.  A simple measure, but a measure nonetheless.  Basically, when we look at the maximum drawdown we can say that this maximum drawdown can happen again at any time throughout the life of the trading system.  This is particularly important when it comes to evaluating starting account size.

As an example, let’s say that you started to trade the system using an account funded with $10,000.  Right off the bat, you can see that this would not be prudent, because as we can see from our maximum drawdown figure if we went into a drawdown immediately after starting our account our account balance would logically be wiped out.

We can see from this quick illustration that we definitely need to fund our account with more money than enough to cover the maximum trading system drawdown.  It makes perfect sense to have a buffer of some sort as well.

I would exercise caution, if you are looking a trading system and the recommended account size is the exact same size as the maximum drawdown.

The maximum drawdown is an essential measure that gives us a better idea of what to expect when trading a particular system.  A comparison of risk versus reward is an absolute essential in successful trading.

Here’s another measure who’s importance may not be immediately obvious to you. That measure is the actual length of time over which the trading systems results were achieved. Some of you may identify this as the length of the trading system’s track record.

Why is this so important? The main reason that this is so important is that the shorter the track record of the trading system is the less significant the track record may be. A trading system with a short track record may be only cherry picking and displaying the best possible period of trading. Don’t be impressed by some wording like “made 10% return this month”…so what. In my personal best month of trading I made hundreds of times more than the above example of 10%…again, so what. In trading, as in life, there are many things that are a flash in the pan…trading systems, get-rich-quick traders, etc.

Fortunately, you and I realize that success in trading is a marathon and not a sprint as so many would love for it to be. Your trading system needs to be one that at least displays the ability to weather the long-term storm. As we all know past performance is no guarantee of future returns. A longer track record may give you more insight into your trading system’s chances of survival than one without as much data.

You should plan to have a long and profitable relationship with your trading system. Like any relationship that you plan for the long term it makes good sense to have as much history on your potential partner as humanly possible.

So shy away from those trading systems that seem to selectively share only one or two months of hypothetical performance. Almost any Forex trading system can have one or two great months. Remember, even a broken clock is right twice a day.

What Is a Forex Trading System?

A Forex trading system can be thought of simply as a set of rules for an organized method used to trade Forex.

Forex trading systems have become extremely popular for a number of reasons. One of the most important reasons for this popularity is that fx trading systems allow you to trade in a more systematic and organized manner.

The objective of a Forex trading system should always be to allow the trader to trade profitably. In order for this to happen, of course, the FX system used must be a good one. In order for a trading system be a good one it needs to be thoroughly tested and researched to ensure it will have a good chance of producing profits when trading in the future. Often these test are performed on past Forex market data in a process called “back testing”. Back testing is done using Forex technical analysis techniques in order to find price patterns and parameters which will allow traders to anticipate future price moves.

One of the very best things about Forex trading systems is that they remove the subjectivity from your trading. By removing any subjectivity you are much less likely to trade haphazardly and therefore much less likely to make needless mistakes. Removing subjectivity from your trading also helps you to eliminate any limiting emotions which may negatively impact your trading performance. Also, the fact that good Forex trading systems have been thoroughly tested gives trader a great amount of confidence going forward. This confidence makes it much easier to trade consistently as a trader need only follow the instructions as dictated by the trading system.

In its simplest form a Forex trading system consists of an entry and exit. A simple example might be as follows:

“Buy the EURUSD if it closes above the 200 day moving average”

“Sell the EURUSD if it closes below the 200 day moving average”

Now understand that what we have just looked at is simply an example for the purposes of illustration. It is an example of a simple entry as well as a simple exit to make a basic trading system.

Forex trading systems are in use by successful individual traders and financial institutions around the world. With a good trading system you too can put yourself on the road to successful trading.

Forex Robot Tips — How to Tell If a Forex Robot Is the Real Deal

Recently, the increase in the creation and utilization of Forex robots has caused great excitement in the Forex market. Forex robots, software that not only makes trading decisions, but also automatically places trades for a trader, are being hailed as the next phase for Forex trading. Many users see it as the ultimate in hands free Forex trading.

This new increase in the popularity of Forex robots has brought changes to the Forex market, causing an influx of new commericaly available products. Although the expansion of products in the marketplace has given consumers variety, it has also made it hard to to weed out quality products from those that are not. The following tips will help consumers successfully navigate the market for Forex robots.

Ignore the Testimonials: It is always necessary to be careful of third party opinions, but it is particularly important when making a purchase in the Forex robot market. Many of the testimonials are made by those who have had their product for a short period of time, so they cannot offer you a realistic view of how the Forex robot will work in the long term. Testimonials can also distract a shopper from the quality of the product by praising unrelated aspects such as customer service or nice packaging.

Does it sound to good to be true? : If it sounds too good to be true, then there is a good chance it is. Get rich schemes are always tempting for customers, and it will be necessary to avoid any product the looks like it will reward to well for too little effort.

Track record: Showing a customer a great trading track record is way many companies target potential would-be Forex traders. However, it is important to look carefully at the length of the track record. Many Forex robots can be successful for the initial few months, but fair perform poorly in the long run. For short-term trading systems there should be at least one year of data and for long-term trading systems there should at least five years of data. Making a decision based of less data then this is the same as choosing without any data at all.

Working Capital Involved: The Forex robot should provide the amount of money necessary to trade effectively. It should not be up to the customer to guess.

Percentage of Winning Trades: This evaluation measurement is frequently misunderstood. Many users assume they must have a have a high percentage of winning trades in order to have a profitable Forex strategy, however this is not the case. In fact, often Forex strategies advertising percentages between 95% and 100% are set that way to lure those with limited experience in Forex trading that don’t understand that such a strategy would be unsustainable.

These helpful tip will allow you to successfully navigate the market for Forex robots. Although it is tempting to jump right into the trading game, it is equally important to take time with the evaluation process and choose the Forex robot that is right for you.

Automated Forex Trading – Pros and Cons

The vast variety of automated Forex trading systems leads novice Forex traders to believe that this is the only way to trade. But there are many ways to successfully trade Forex. Using automated Forex trading software, also known as “Forex robots,” is one trading technique that is gaining popularity.

Automated Forex trading can be profitable as long as a trader selects a lucrative Forex robot. Unfortunately, many rookie Forex traders are fascinated with the automation of a trading system and thus distracted from pursuing other trading strategies. A Forex robot tirelessly computing ways to grow one’s money is a tempting reprieve for any Forex trader. But one should examine the differences between automated Forex trading and manual Forex trading before giving in to this fascination.

Manual Forex trading– With manual Forex trading, trading signals are generated either at the discretion of the trader or by Forex signal software. If a trader chooses, he/she has the ability to scan for specific types of set-ups and then make a move whenever he/she feels it is most advantageous.

With Forex trading system software, a computer program reads Forex data and then runs calculations on it. These calculations produce a Forex signal that a trader uses to manually place orders using a Forex platform.

Automated Forex trading– Automated Forex trading is touted to be hassle-free. Automated Forex trading software not only generates Forex trading signals, but it also places trades based on those signals. In general, this type of trading appeals to more people because of the freedom it offers them. They aren’t tied to a computer screen or telephone in order to be successful traders.

A new trend has emerged in automated Forex trading: using a Forex VPS. VPS stands for Virtual Private Server. A VPS is a computer server housed in a remote location that will run Forex trading software non-stop. A benefit of using a Forex VPS is that it can act as a back-up if a trader’s computer malfunctions. The VPS will conveniently continue placing trades automatically.

Clearly there are financial benefits to using both manual and automated Forex trading styles. Automated trading is more useful with short-term trading systems, such as Forex day trading or scalping. Longer-term Forex systems typically allow traders to place their entry and exit orders and walk away. Therefore, manual Forex trading works fine for those wishing to catch the big moves in the Forex market.

Both automated and manual Forex traders must first research all trading options in order to feel comfortable that their chosen trading systems will reap profits. It is essential for traders to test their automated Forex trading systems with a demo account prior to trading with real money. This will allow traders to test the system and determine whether or not it is performing according to their expectations. Once they are comfortable with the success of their demo accounts, it is time to begin the real work.

How To Choose the Best Forex Trading Strategies

There are so many forex trading strategies available that it can be overwhelming for a new trader.  Making your way through all the free information, high priced courses, blogs, and brokerage courses is a big task.  These tips will help you choose ones that work for your situation.

As an example, some traders use strategies to trade the news. Helpful  forex economic calendars online show which countries are scheduled for announcements on a given day.  When interest rate changes are announced in the U.S., these traders are ready to make the most of it.  With dramatic news, there will be a sudden spike up or down with the U.S. dollar pairs.  Day traders and scalpers like these scenarios, but it is essential to watch your trade.  Other traders advise you to sit by until the market settles after one of these events.  They would rather be out of the market than to suffer a big loss.  Trading the news can be lucrative, if you know what you are doing.  Understanding this scenario that occurs regularly in the foreign currency exchange market will keep you ever alert to protect your deposit.

New traders are often enticed by forex trading strategies that offer software with signals.  You are promised that if you buy when the arrow points up and sell when it points down, you will get rich.  This is not to say there are no good software programs available.  But it is important to note that you need a backdrop of knowledge about the market for them to work for you.

As an example, many programs that get a new trader so excited, fail to teach the value of always knowing 3 things. The trend of a pair, support and resistance, and the average daily move of a pair are all needed to begin evaluating a trade.  Such knowledge will keep you from pulling the trigger on a buy trade when the arrow shows up if resistance has been touched and the overall trend is down.  If the pair has already moved its daily average, there is probably not much left for you.  Of course, these are general guidelines, and sometimes the price will plunge on up despite all the conventional wisdom.  However, with a good forex trading strategy that follows these suggestions, you will be in profit far more often than if you ignore them.

It is better to start with simple strategies that employ only 2 or 3 easy to understand indicators.  Use them in a demo account with a major pair like the GBP/USD or EUR/USD.  Stick to one pair for awhile until you are familiar with it.  Despite the promises that a forex trading strategy will work on all pairs, it is far better to learn the idiosyncrasies of one before you move on to another.

Another claim often made in a strategy is that you can use it anytime at all.  Except for a very few strategies, this is utter nonsense.  High volume is necessary for successful trading.  You must trade when the markets are going at full steam.  The best methods fail when there is very little trading going on.  Think about your lifestyle in relation to times the markets are open as you evaluate various trading strategies.  If you live on the U.S. West Coast, getting up at 5 am to catch the overlap of the London and U.S. markets, may not be something you want to do.  On the other hand, in Europe, it may be easy to trade the London open, which is the most exciting, high volume market in existence.

You can do well in foreign currency trading by using good forex trading strategies.  This underlying knowledge will help you make good choices on your road to consistent profits.