You dont have anything to lose What a fallacy !

In the time in which I have been reviewing and using automated trading systems I have come across a countless number of commercial expert advisor sellers and their websites. I would have to say that from all the things they say, one of the worst and most dangerous is their ultimate catch phrase "you dont have anything to lose". Today I decided to write a post about why this phrase is not only totally untrue but also exceedingly dangerous for new traders who dont know anything or too little about the way in which automated trading works.

First things first. The reason why this statement has become so popular amongst expert advisor sellers is because most of them offer money back guarantees. If you dont like their software after a given fixed period of time whatever money you used to buy the EA will be given back to you. So nothing to lose then ? right ? You buy the EA, you use it, if you dont like it, youll get your money back, no harm done, if it is junk you will get your money back.

Well my friends, this is a big mistake ! You have to take into account all the risks you expose yourself to when you buy an automated trading system. Since the objective of most people is to run the expert advisor on their live accounts for long periods of time, the long term profitability of the expert advisor plays a huge role. Take into account that most commercial junk experts out there are engineered to give you short term profits with a huge market exposure that will eventually cash on your account. If you are trading with your money and you lose it, you risk losing much more than the purchase price of the EA. There is no way in the world in which you should be able to know if the EA is long term profitable with just 6 weeks of testing which is what most of these experts offer as a long term guarantee.

So lets see. Joe buys the Superhype EA which has a 6 month guarantee. Joe trades this EA on demo for the 6 weeks and the expert has actually made significant profits, so no worry, Joe is satisfied with his product and does not want a refund. Now, Joe puts his real money on this EA and at month 3 of running it live the EA goes into consistent draw down and in month 5 Joe is down 85%. Joe lost the 100 USD that Superhype costed him plus 1000 USD he has on his live account. Nothing to lose ? Think again, you have everything to lose when you expose yourself to any automated trading system. The only thing that can give you assurance that this will not happen is to have an EA that fulfills well established criteria for long term profitability, something most commercial experts out there do not do (check my reviews to see what I mean !).

If you would like to learn more about how you can know which experts are long term profitable and how you can profit from automated trading using trading systems with realistic profit and draw down targets please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. I hope you enjoyed this article !

Diposting oleh Unknown 19.31 0 komentar

What would you like to know about automated trading

Last week, I announced that I am working on a new version of my forex automated trading ebook. This version is not only an update but mainly a full rewrite of my efforts to help retail traders out there in the world of forex expert advisors. Before finishing my new ebook (which will be released on July the 19th) I want to make sure I include as many things as I can that may help the retail trader out there know the ins and outs about automated trading.

For this reason I decided to write this small post. The objective of this post is to ask you, fellow traders (both novice and experienced) , what would you like to know about forex automated trading ? If you want to cooperate and help me bring quality information to the world of retail forex traders please leave a comment answering one or as many as you want of the following questions (you can also email me at ekans_@hotmail.com if you find trouble leaving a comment).

• What has been the hardest for you in the world of automated trading ?
• What specific things would you have liked someone to explain to you before you ventured into this area.
• What questions do you find unanswered in your quest for automated trading profitability ?
• What would you definetely like to know about automated trading ?

I would like to thank the people who take the time to answer these quetions in advance, your help will most likely make my ebook much better for both experience and novice forex traders. It is my goal that with this new version of the ebook many people will be saved from losing their money and will have a much clearer idea of how much and how money can be made by using automated trading systems. I will also probably use your answers to write a few blog posts about the questions mentioned above :)

If you would like to purchase the actual ebook at a lower price (you get all future updates for free, including the one commented on this post) or learn more about automated trading systems please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. Thanks again for your answers !

Diposting oleh Unknown 05.32 0 komentar

How to Treat Forex Like a Business Ten Things You Need To Do When You Trade

The internet is filled with people who advice and give their opinion about how others can succeed in forex trading. Many times this advice is extremely vague and does not have any practical implications with it that can actually help newer traders succeed. One of the most common examples of this is how more experienced traders tend to tell people new to the market to "treat forex like a business" while they give absolutely no specific advice on how you are supposed to do this. Sure, for successful traders this is obvious and the advice needs no further explanation - since they are already treating forex like a business - but for new traders the advice is totally meaningless since they do not know how to trade forex like a business or the steps they need to take to make this a reality.

On todays post I want to share with you 10 practical things you need to do to treat your forex trading like a business, after you do these ten things you will find that your trading will be much more organized, your goals will be much clearer and you will be on your road - or at least a much clearer path - towards long term profitability. Definitely treating your forex trading like a business is extremely important but what does this mean ? What practical decisions can you take to change the way in which you trade the forex market ? Keep reading to find out !

1. Think in terms of goals and expenses. The first change you must make is around the way in which you look at forex trading. If you are going to treat this venture like a business you need to think about it in terms of goals and expenses. In trading goals are profitability targets and expenses are both trading costs and losing trades. A great part of your success will fall into being able to look into your trading as a set of goals and expenses.

2. Determine your plan. This is perhaps the most important part of trading which is to determine how things will be done in your business. If you were opening up an aluminium can factory you would have to figure out how you are going to be making the cans, who will buy them and who your suppliers are going to be before you even think about starting your business. Forex is the same thing, you need to have a trading plan which is merely a set of rules (either mechanical or discretionary) that you will follow in your business.

3. Determine your goals based on your plan. Your plan provides the anchor which allows you to determine realistic profit targets. After you come up with a plan you need to deeply evaluate it - through reliable simulations - to obtain a given set of profit targets that you will be able to use. If your profit targets are not what you want they you can change your plan - and reevaluate it - to make them better. When you are happy with your goals, continue.

4. Determine your expenses based on your plan. The next important thing you need to do is understand what your expenses will be. What percentage of your account will you be losing in average every year before reaching your goals ? For how long will you lose that capital ? Accurately determining variables such as the maximum draw down, the average draw down period length and the probability to have a losing month are key aspects of your forex business plan.

5. Determine your capital requirements. Since you now have a plan with goals and expenses you now need to determine your capital requirements which is simply the amount of money needed to execute your plan. Certainly different trading strategies will require different amounts of money to be tradable. This also depends on the amount of money you want to make, if you are aiming to make 20K a year and your goal is 20% then investing 100K might be necessary while if the only thing you want to do is execute your strategy with the minimum possible capital you might only need 200 or 1000 USD.

6. Draw best and worst case scenarios based on your simulations. A very important thing you need to do is to come up with how future scenarios might look for your trading strategy. If your simulations were done in a reliable manner then you can use 10 year backtests to get a picture of how best and worst cases might look like. Your next year might be as profitable as the most profitable year of the past 10 years while it can also be as bad (or worse) than the worst year. Having these pictures is vital since it will allow you to see where your plan is going and if what you are experiencing is or is not normal.

7. Come up with a worst-case scenario. As in every business there can be a point when the expenses are way beyond those programmed by the plan and a change must be made in order to survive to the future. In your trading business you need to come up with a worst-case scenario so that - in case your strategy becomes too risky - you will know well before hand when to change it. I generally use two times the 10 year historical maximum draw down as my worst case scenario, something that has worked well for me.

8. Do monthly, quarterly and yearly evaluations. Another important aspect of treating trading like a business is evaluating how your business has performed in a monthly, quarterly and yearly manner. Just like all other business do you should generate reports and analyze how your strategy has performed during these time periods. It is always important to know if your expenses are what you expect from your plan (within the bound of normal draw down periods), if your goals have been met and if you have reached any of your worst case scenarios. Staying on top of your plan by evaluating it frequently is a vital part of survival.

9. Do not change your plan when it is working as planned. A big mistake - perhaps one of the biggest - new traders make is to jump away from a trader system just because profitability goals are not being met. If a trading system is losing money within the programmed expenses and the 10 year simulations you have made then there is no reason to run away from your trading plan. While your draw downs remain within what you planned when you evaluate the strategy your business is actually working as planned.

10. Do not increase your goals or your expenses. Another very common mistake made by traders who are not yet experienced at treating forex like a business is the change of their goals and expenses along the way. When a system performs well they increase the risk (to increase their profitability goals) and when it is doing badly they sometimes increase their draw down tolerance to allow the system "to recover". There is a reason why you have set goals and expenses and worst case scenarios and you should NOT change them just because of short term performance. Every change in the business plan needs a total reevaluation of goals and expenses which should always be done if any detail is changed. Committing to a set of goals and expenses and sticking to them is a big part of success.

Although the above advice is only a small part of treating forex like a business it does gather all the most important aspects you need to take into account when you want your trading to be something serious, more predictable and less emotional. Treating forex trading like a business with adequate planning, goals and expenses is a vital part of trading which most people new to the market simply ignore or are too lazy to develop. If you follow the above advice and develop a trading plan with an idea of what the behavior of your system might be then you will be miles away from the large majority of new traders.

If you would like to learn more about system evaluation and how you too can develop mechanical systems with reliable simulation results please consider joining Asirikuy.com, a website filled with educational videos, trading systems, development and a sound, honest and transparent approach automated trading in general . I hope you enjoyed this article ! :o)

Diposting oleh Unknown 13.15 0 komentar

The Road To Financial Freedom Part No 2 Is this Right for You

It is not uncommon for people to persue the dream of "financial freedom" thinking only about the fact that they are tired of a 9 to 5 job and want to have an easy way to earn a living in which work is hardly ever present. On todays post of the road to financial freedom series I will try to give you a good insight into what I think the goals and mindset of a person who wants financial freedom should be and which people should not seek financial freedom because they are either doing it for the wrong reasons or with the wrong perspective in mind.

In what I have seen, there are mainly two types of people looking for financial freedom (trading wise at least). The first are people who are willing to do whatever it takes, work as long as they can, do whatever effort they have to in order to arrive to the dream of profitable trading -manual or automated- and then there are those who simply just dont want to do anything and think of trading as a way in which an income can be achieved without lifting a finger.

Things evolve differently for those two kinds of people. The first kind often struggles a lot in the beginning and have to work about 10 times what they thought they would have to, many with obssesive personalities end up with broken families, health problems, etc, due to the sometimes long hours and inevitable amount of hard work that must go in either manual or automated trading. The fact that they also put a financial burden on their families and take money to trade - almost certainly losing all of it at first- makes things harder for the people around them, specially spouses who sometimes fail to understand the goal to be achieved (mainly because the non-trading partner is usually more rational at this point).

The second kind works almost as hard as the first but in a different area. Their work is not centered on actually learning what they are doing but it is centered in the finding of the "system" that will make them rich without signficant effort. These people often give trading a try for a while and after 1 or 2 years they give up because of the fact that everything they have tried has eventually failed them (or has not achieved the income level they wanted), eventually they find out that their is no "free lunch" and that trading is not the bottomless "gold mine" they read on the sales newspages. These people either quit, or become part of the first group.

Now, there is also a problem associated with the intented amount of money people want to make in trading. Often I hear people talking about a 5-10% consistent monthly profit in forex being a "rational" thing to expect (these people NEVER know someone who has actually been making that kind of money consistently -for a few years-, it is just a dream created by the sales pages). Oh boy, 5% every month would turn 50 USD into one trillion dollars in less than 60 years. The profitable traders I know are often happy with a 1-3% average profit per month, which is very good for most purposes. Take into account that in financial markets, doing better than the S&P 500 is considered to be "beating the market" in the sense that you outperform buy and hold strategies. That is something that very few people in the world are able to do.

Novice trader minds are often "contaminated" with the unrational notion that the forex market is able to give very high profits, thinking that 10-20% per month or more is a rational expectation. The worst thing is that people get into their minds that it is something they can achieve if they work hard. The people who are hard working but believe they can achieve a profit level which is simply unprecedented are the ones who get the worst out of it. They lose and lose money and they struggle and struggle trying to achieve something which is simply not within realistic expectations (taking into account what most profitable traders I know do achieve ). They often get beat up, chewed and spit by the market and in the end they are beaten and defeated. These people usually quit at this point when they realize that they will not get to that million dollars from that 1000 USD account.

My objective with this post is to speak to all of you and tell you that you should give this a very HARD and long look and think about if trading is really what you want to do. Trading is a very intense, time consuming, work intensive way of life. Starting to trade with realistic expectations for success requires good capitalization (at least 2 to 5 times your expected yearly salary if you expect to live from this) and a commitment to work through all the emotions and frustration that will arise from attempting it. Trading is also not your 9 to 5 job so you may have long periods of loses with no paycheck at your door and there will be no one there to pat you in the back and tell you that everything will be ok. As I said on the last post, it is entirely up to you. Your possibilities are limited by your efforts.

For most people out there, forex is not a good opportunity for "financial freedom". Most people are simply undercapitalized, unfamiliar with the whole concept of trading and unaware of how their emotions respond to the trading world. Most people are also unable to deal with the stress of having no paycheck in the mailbox, no "fixed" income and no guarantee of future profits. The extremely large amount of hype and useless things out there dont make it easier for them either. The fact that 90% of new traders fail speaks for itself. If you think forex is not the way to go, then it does not mean you cannot achieve financial freedom, you can always look at a brick and mortar business or an online business which aligns better with your knowledge and personality.

However, if you are truly interested in trading after all that I have said, then you will enjoy the rest of the road to financial freedom series in which I will explain to you the steps I took and all the things I have done (and what I would have liked to do) in order to achieve financial freedom with forex trading. My first step was simple. I wrote in a piece of paper : "I am going to be a profitable forex trader". If you are also interested in my work and would like to know about how profitable trading can be achieved with realistic profit and drawdown expectations on the forex market please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. I hope you enjoyed the article !

Diposting oleh Unknown 19.45 0 komentar