Forex Tips - How to Avoid Scams When Choosing Forex Trading Systems
If you surf the internet, you will come across plenty of sales page selling various forex products, with lots of hype. I know there are many forex trading systems out there in the market and every product seems to claim that they can make big money in a short period of time, without too much capital, it is very easy to use and anyone can do it without any knowledge in trading.
1. Look Out For The Forex Trading Track Records
Although this seems common sense, but there will still be forex traders buying a forex trading system without looking for the track records first. If that is so, then there is no wonder why they lose. Please don't be attracted by the claims like: 'near 100% success rate', 'earn your first million in 2 years trading forex', 'forex training that can give you financial freedom ever' and many more.
Look for the real time proof of the forex trading system because vendors will try to cheat by using a track record on a hindsight (they already know the closing prices), so look for a trading statement that they are trading daily.
2. Look Out For The Largest Drawdowns
Any forex strategy will have a drawdown and it's a matter of whether it is small or huge. This means that your trading account will experience a drop in value or margin which is in floating losses but yet the trade is still opened. Although the losses are not realized, but we should be looking for a forex trading system that gives you as little drawdowns as possible, a guide will be around 5% - 8%.
Depending on the system's trading strategy, the drawdowns may be days, weeks or even months, so you will have to make sure that you are comfortable with those down swings.
3. Are You Comfortable With The Trading Timeframe?
This is a very important factor to look out for in a trading system. If you are working all day with very little time to trade the forex market and you purchased a trading system which requires you to monitor several times a day, then you are simply wasting you money.
What's the point of having a good system but yet you have no time to trade and make profits? So if that's the case, you might want to look for some systems that will allow you to trade but only have to monitor maybe once per day...and this type are mostly swing trading strategies. So be anxious to find out timeframe is the forex trading system operating on first.
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