Forex Trading System – Week 2
If you’re following the articles about trading systems, you will have read that I bought Forex Money Machine last week. After checking out the market for a while, I placed a EUR/USD trade yesterday using the “Forex Runner” strategy. This article is my observations about how the system works in real life.
Without giving away the proprietary trading methodology, this system is a swing trading system. It recognises that there is a difference between random market noise and meaningful price movements, and that tradable movements occur several times a day. By “tradable” I mean movements of enough magnitude to indicate market direction and allow a trader to make a profit.
Unfortunately, the trade was not profitable. It triggered the stop loss and I lost about 20 pips. Does this make the system a failure? Definitely not. A good trading system has positive expectancy, which means that on average, it makes a profit. This does not mean every trade will be a winner.
The difficulty in this case was some uncharacteristic low volatility in the market. This meant that prices tended to move within a low range, reducing the opportunity for profitable movements. This may have been a function of the time of day, or the day of the week. At present, the volatility is much higher, so I will try again soon.
The positives of this system are that the entry point, stop loss and profit target are defined ahead of time. In particular, the entry conditions are simple to identify. The stop loss is tightly defined because the entry points are very clearly targeted. In my mind, this is a sound system, and I will continue to trade with it as opportunities arise.
In addition, I’ll continue to look for trading opportunities for the primary trading system in Forex Money Machine which is called the Forex Cash Cow. This identifies and trades larger interday movements.
If you are interested in purchasing the Forex Money Machine, you can do so here.
Tags: forex money machine, forex trading system, trading system review