Forex Expert Advisors are one of the most popular ways for novice traders to seek big gains in Forex trading but they don’t work and the reason is obvious and the subject of this article…

You see big claims made by vendors but when do you ever see a track record of real gains, that’s been audited and verified by an independent source?

I have never seen one. Anyone can claim they can double your money each month in Forex, have 90% accuracy and only incur small drawdowns but it’s not possible in the market and any experienced Forex trader will tell you this and no experienced trader would ever use one of these robots.

Do you really think you can pay someone $100 or less than get a better track record than the worlds top fund managers on millions a year in salaries and bonuses?

If they did work, brokers, fund managers and banks, would sack their dealing teams and use a Expert Advisor instead its far cheaper than a multi million pound dealing team! Have any done this? Of course they haven’t.

It amazes me that sane, sensible people, actually buy these systems and think there going to win at Forex with no effort but they do. These people should really think of the old saying if it looks to good to be true it is.

You can win at Forex trading but like in all areas of life, you need to learn skills and if you do, you can make a lot of money trading. The fact is if you make the effort to get the right Forex education and education, you can make profits at Forex trading.

No other venture, offers you such great rewards for the effort you need to put in than global Forex trading - so get the right Forex education and get on the road to currency trading success.

This is the question many novice traders ask and of course it depends on numerous variables, some of which include your starting amount of capital, your risk tolerance etc, but if you were to make 100% per annum you would be up there with the very best.

Drawdown periods vary from trader to trader but typically you will face a drawdown of 30% from your peak equity at some point and you will face a drawdown period of a few weeks.

There is a huge industry in automated Forex robots that tell you that you can double your money each month, make a regular income and experience no real drawdown but this is pure fantasy and not the reality of Forex trading.

So what is a realistic amount you can make per annum in Forex trading?

When I say 100% per annum is a realistic annual return to traders, many look disappointed but this is a huge gain! If you look at it in business terms (and Forex trading should be seen as a business) any business that returns 100% per annum in profits would be seen as very successful. Furthermore, think of the compound affect of your capital and you will see this will see your money grow very quickly over time.

Many traders want to make money too quickly and they see there broker will give them 200:1 leverage or more, so they want to use it - but over leverage destroys more novice trader accounts than any other factor.

The risk of course increases when you leverage up your capital but most traders forget the impact of transaction costs. The transaction cost may look small on un-leveraged amounts but on a leveraged sum in relation to your account equity it’s huge and traders trading 100:1 leverage can very often see an impact of 10% or more on their accounts ( depending on pip spreads) so you have to make that amount just to break even.

Novice traders should really start trading with no leverage, until they are comfortable with what their doing and my own view is - that a leverage of 10 - 20: 1 is plenty for most traders.

Money management and preservation of equity, is the key to making money long term In Forex trading. Always assume the worst first on your positions and things can only get better! As the old gambling saying goes:

If you want to win you need to bet but you can’t bet without chips”

It’s a fact that professional poker players make excellent Forex traders. The reason for this is they always have their eye on equity preservation and are not bothered about taking losses. They know they have to pass hands by and fold hands, if the odds are against them. Compare this to the average Forex trader, who takes losses personally, runs them hoping they might turn around and lets his emotions get involved and lack discipline.

If you want to win at Forex trading base your Forex trading strategy on sound money management and protect your equity and you will get the opportunities to trade the odds for big profits and be on the road to triple digit gains.

Here we will look at a long term option trade in the British Pound against the US Dollar and how you can trade it for a huge gain, from the point of the fundamentals and technical picture…

At the moment the dollar is strong against the Pound - but in the coming months a cheaper US$ is inevitable, to restore the global imbalances reflected in America’s huge current account deficit but this will not become a factor, until we see an improvement in the global economy and were not there just yet.

So when will this happen?

The answer is we don’t know exactly but sometime between now and mid year when it does occur, the Pound will be one of the main currencies to benefit. At present the smart money is buying the Pound.

If you look at the CFTC Net traders positions on currency future positions, you will see the commercial traders (The big boy hedgers who know value) are buying and are building a long position. On the other hand, the speculators (who always lose at big trend changes) have a huge net short position.

The commercials are long the Pound with over 56,000 contracts long and just 15,000 short of course specs are over 40,000 short and just over 7,000m long. The smart money is accumulating the dips showing the Pound is fair value at current levels. Were with the commercials and this one and sooner or later the Pound is going up fast. If you don’t know how to use Net Traders, as they allow you to see what the best traders are doing and it’s free.

So how do we trade the Pound?

Simple, we see the Pound as a buy above the 1.40 area and you don’t need to be to be to accurate buying exact levels, as we are going to use September call options. If you don’t know about options check them out, there a great risk control tool which gives you limited risk and unlimited rewards.

So long as the price trades above our strike by expiry the option will make money. So we don’t have to clever and get exact pinpoint timing and short term price spikes, cant stop us out as the option gives us limited risk.

How Far Could the Pound go?

We see it trading by the time the option expires to around the 1.60 level or higher which will yield a great profit if it occurs.

Here we will look at a Forex trading which is very simple to understand and easy to make money with. We will give you all you need to know about this system in this article and how you can use it for currency trading success…

The Free Forex trading system we are going to look at only has one rule and was devised by trading legend Richard Donchian. The system takes advantage of a simple 4 week cycle which occurs in currencies - Let’s look at the rule and its this:

Buy any break to a new 4 week high in a currency and hold it. Simply wait for a new 4 week low to be hit and sell it. Keep doing this as 4 week highs and lows are hit and always maintain a position in the market.

It’s incredibly simple but if you test it works and will get you in on all the biggest trends and help you hold them. Breakout trading is logical and always works, as markets always trend in addition, all new trends start and continue from new market highs and lows.

This system has been used by some of the best professional traders and while it’s simple, that’s an advantage in Forex trading as all the best systems are.

Today, you will see a huge amount of Forex robots and Expert Advisors sold online which claim they can make you money but this system, over the long term will beat them all. Even better our Free system has a real track record, while the new trendy robots just have simulations and back tests on paper so before you spend your money on one of these systems, test this great free one.

The system can trade any financial market not just currencies and works best on a spread of currencies and other financial instruments. You can also restrict drawdown, by adding exit filters based on either a one or two week moving averages.

The system doesn’t trade much and it gives you a simple objective signal you follow which will take no more than 15 minutes a day to check. This system is simple, logical, time efficient and can help you enjoy currency trading success.

It’s free of course, so you have nothing to lose by taking a look at it; check it out and see for yourself.

This Forex trading tip is very simple and you can apply it to your Forex trading strategy and make bigger profits instantly. Most traders would do well to study it, so let’s look at the 80-20 rule in more detail…

The 80-20 rule is used in many areas of life and in business states that - a company will normally generate 80% of its sales and profits, from just 20% of its clients and in Forex trading, the 80-20 rule is all about concentrating on the 20% “that matters” so concentrate on high odds trades only and cut back trading frequency.

It’s a fact most traders trade to much, they scalp, day trade or think that the more they trade, the more they will potentially make in profits but over trading and taking low odds trades, simply leads to equity wipe out. I know traders who trade no more than twice a month on average but make triple digit annual gains!

These traders are not interested in trading for the sake of trading, they only want to trade when they see an opportunity to trade the really high odds trades which can yield huge profits. If you think about the 80-20 rule, it makes perfect sense in terms of its logic. In Forex trading you don’t get rewarded for making more effort or trading more, you are judged only on your profits per trade and that’s it.

So cut back your trading frequency and you will then enjoy bigger profit potential, with less risk and even better, you will spend less time on your trading and will have more time to enjoy your profits.

I read a lot about sophisticated Forex trading algorithms online and how traders can use complex mathematical equations, to predict future Forex price movement but which is the best? Let’s take a look…

In a moment, I am going to give you a simple algorithm which makes huge gains you can use but first, let’s look at the concept of algorithm trading. We will start with a simple fact and its this, a 100 years ago, around 95% of all traders lost money and the same ratio lose money today; now think about this fact and you will come to a compelling conclusion:

Despite all the advances in forecasting, computer power and speed of processing data, the ratio of winners to losers has not changed in 100 years and traders have been applying ever more complex mathematical formulas in the period. You can conclude from this, that all the technology advances have not helped more traders make money - Why?

Because Forex markets move to probabilities not certainties and in this type of market, mathematics is of limited use. Instead of trying to be complex and seeking perfection (which is not possible) traders should focus on making money and that means using simple trading systems!

Simple formulas or algorithms, work better than complex ones, as they are more robust in the face of ever changing market conditions. Below find a simple one rule equation which has been making money for savvy traders for years:

Buy a new 4 week high and hold. Wait for a new 4 week low to be hit and sell, then keep switching positions as each new 4 week high or low is hit and always have an open position in the market. Simple it is but it works, test it and see. The above equation was devised by trading legend Richard Donchian, back in the late seventies and it still works today and is the perfect example of a simple equation that works.

So when you hear someone telling you, that you need to use complex formulas to win at Forex trading, don’t believe them; its simply not true. Simple systems and equations work and always will and that’s a fact.