what is forex: what is forex

what is forex

It is not too long ago when veteran traders used to draw trend lines using pencil and paper. Market data was sent by physical mail to them and there was no computer and trading desk. Were they really not able to perform by not using super analytical charting platforms? Were they all losers? I bet they were not only doing great, but compared to my fellow traders (Including me) they were absolutely sophisticated traders. I don't want to undermine anyone as we have many legend traders and hundreds of good traders who actually make money around the globe on daily basis. My argument is merely pointed at those traders who think that broken accounts is a result of them not really having the best strategy to trade in a safe and secure manner while at the same time having a one year outlook for reaching 1 million dollar, through a 10000 buck trading account.

Where a trading strategy is introduced as a reliable method of making money for traders, there are some questions that must be asked, to evaluate the accuracy of the given strategy:

    Is it a trend or a range market based strategy?
    If it works as a trend based strategy, what can the strategy offer to trade around range markets, and vice versa for the range market based strategy?
    Is it a day trading strategy or planned to signal longer term trading signals?
    If it is an Intraday trading strategy, how many hours are required and when exactly should I sit down and watch the screen?
    If it is a long term strategy, what is the estimated possible drawdown in pips?
    Is there any historical performance of trading using the given strategy in real accounts and if the answer is "YES" for how long? (don't rely on less than one year)
    Are there any money & risk management rules attached that are specifically tested on this particular strategy?
    What is the average/highest/lowest risk to award ratio of the last year's trades?
    Is there anyone who has used the strategy on a real account? (Be aware of marketing tactics and ask someone who is honest).
    What is the outcome of the trades for the above mentioned trader? Even if positive, don't necessarily trust that exact approach for yourself, because one cannot fit a common strategy with the same characteristics to every trader. In this case you need to test it yourself.
    Ask the developer about the psychological pressures that may come upon you while using that strategy on real accounts (We recommend to ask your mentor to analyze the strategy)
    Does it have an Exit and Stop Loss rule for different market situations?
    Ask the developer if you can get back to him occasionally to ask questions about some points that you don't really understand (don't make it 100 times a week cause he/she won't sell any strategy to you).

However, I know a couple of guys who experienced real damage and disappointment where they tried to believe the strategy given to them from the first day. So I am being serious when I say don't ever try to apply a new strategy on your real account, unless you have met an expert and he has given you the green light, or if you have just passed one year of continuous testing.

Final Words:

You may ask for how long? One year... it's too much...I can't wait...!! Well then you can try it, but count on it as a gamble...You know the gamble...Too many jack pots, nothing Hot Shots.

Let science make you wealthy step by step. Don't ever think you are smarter than any other trader because no one knows what is going to happen next. So it's better to be next to those wise traders who win, because they are disciplined and have spent a long time practicing before doing anything real on their money. Try to admit it if you are not sure enough about your ability, and try to solve the problems with patience and remember it is worth it if you make that million dollars three or even five years later, instead of losing what you got from hard work within just a couple of days.

Also, not to forget, forward any questions you might have on this article to my email address s.a.ghafari@iftc.ir and I will try to respond as soon as possible.

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