Automatic Forex Day Trading Systems - Choosing the Right One for Profit

By: Monica Hendrix Posted on: 2008-04-05 Downloads: 46 ** Print Article ** ** Copy Article ** Please Rate this Article 5 out of 54 out of 53 out of 52 out of 51 out of 5  Not yet Rated

Article Summary: There are many automatic forex day trading systems on the net and they appeal to traders as they require little effort - all you do is follow the trading signals and while profits are small, they build up to a large regular income - Let's look at how to choose a good one...

There are many automatic forex day trading systems on the net and they appeal to traders as they require little effort - all you do is follow the trading signals and while profits are small, they build up to a large regular income - Let's look at how to choose a good one...

While automatic forex day trading systems sound great in theory, there of little use in day trading because the logic day trading is based on simply doesn't work.

Sure you see track records of extraordinary gains - but you also see this disclaimer take a read of it and you will see the track record is worthless:

"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".

If you see an automatic day trading system on the net, you will see the above warning or similar, in simple terms it means the track record is made up.

You can essentially simulate anything you like in hindsight, knowing the closing prices and that's not difficult to do. If we had the luxury of that in real time trading, we would all be millionaires in no time - sadly, forex trading is not so simple.

These systems are normally sold by marketing companies or failed brokers, who see the chance to make a quick buck at the client's expense and they are very successful at it.

So why doesn't day trading work?

1. All volatility in short time frames random and cannot be predicted.

2. In light of the above all support and resistance levels and technical indicators cannot be used.

3. By its very nature day trading breaks the fundamental rule of trading - run your profits and cut your losses. Sure you cut your losses and you have a lot of them but when it comes to profits do day trading systems run them?

Of course not - they snatch whatever they can get so, you have load of small losses and profits that don't cover them; this with the random nature of short term moves, means a wipe-out of equity.

So if you are thinking about using an automatic forex day trading system don't, it will end in tears!

Article Source: http://www.upublish.info

About the Author:
Monica Hendrix
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