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Forex Trading Systems

Forex trading systems are becoming increasingly popular. We all lead busy lives, and people generally don’t have the time to engage in lengthy research for each and every trading opportunity. So, what are the solutions?

1. Subscribe to a signal service

2. Advice from an advisory broker

3. Buy an automated strategy

4. Learn a pre-determined strategy

Let’s have a look at each of these in turn.

Forex trading systems

Subscribe to a signal service

A signal service is where you are sent trade ideas to your email or phone, for you to then consider and trade.

Pros Cons
Instant access to “quality” trading opportunities Entering at different prices to the signal
Hopefully a verified track record - to prove success over a period of time Not learning anything. i.e. if service stops, you have no skills
Trades can appear at any time which may not be convenient
Generally short term trades, so usually act on them too late.

It is an attractive solution in theory, but practically, signal services don’t generally help. The time delays between the signal being sent and then acted upon, can be problematic and lead to different results.

Advice from an advisory broker

Having a trading account with an advisory broker can give you phone access to experienced brokers and their research analysts. They need your permission to place each trade on your account, and will usually phone clients in order to inform them about upcoming opportunities. Similar to a signal service, this offers a more personal approach where you can discuss trading ideas and instruct your broker to trade on your behalf. Advisory brokers should be regulated by the appropriate local regulator, such as the financial Conduct Authority (FCA).

Pros Cons
Access to experienced brokers and research Late opportunities if they have called all their other clients before you!
Phone communication throughout the day to keep you informed. Can be inconvenient, which leads to missed opportunities
Regulated (should be) Charges are often very high, making profitable trading is unusual.
Fees are commission based, so you pay for the service regardless of whether you make or lose money.

Costs are generally the biggest problem. A good advisor can only look after a small number of clients and offer a good service. As such, fees are traditionally high compared to placing your own trades. In many case, costs can escalate out of control, because the more trades the broker encourages you to place, the more the commission accumulates. You would be wise to consider the likely costs against the research performance before engaging in this activity.

Buy an automated strategy

So, you open an account, you install a programme onto your trading platform and it automatically trades your account for you, like a robot. Again, a good idea in theory if you have the right robot! It is certainly attractive to think that your trading account can be actively traded whilst you are asleep. Like anything, there are good services and bad services. Often these automated strategies are very cheap, people buy them, plug them in and let them loose on their trading capital.

Why would people leave their capital at the mercy of a cheap system, bought on the internet? Odd decision isn’t it.

Brokers tend to love automated systems. Most offer the platform Metatrader (MT4) for that reason. Why? Because most automated strategies lose money. Surely some make, but they can hedge those trades, but generally most lose money.

Ideally, a little more control is needed to make money.

Learn a pre-determined strategy

So, we need a bit more control, we need our trading costs low and we need to be able to place our trades when we should. This means one thing. Being your own trader and having your own strategy. So instead of buying a forex system, you could learn a strategy that you can learn to trade yourself. This gives you a skill, keeps your costs down and gives you full control over the timing.

Do you have the time and expertise to develop your own strategy though? Most people do not in which case, we can teach you one of ours. Our simple to use and highly effective strategies will give you a rules following approach to the markets. Giving clear guidance on exactly when to enter and exit trades. You then trade at a time that suits your day to day lifestyle. Simple.

Why not find out more by attending one of our free online trading webinars.