The Online Currency Trading System Racket – What You Need to Know

The Online Currency Trading System racket is rather like the gold rushes of the nineteenth century. The people who made the most money tended to be those who sold the pickaxes and shovels, the maps and guides to the actual gold diggers.

And there’s money to be made all right in selling online currency trading systems, forex guides, trading robots, and so on to the masses of people now coming to this particular market looking for their fortunes. But is there money to be made in using these systems?

Money is certainly being made in currency trading, or Forex. But bear in mind that this market does not actually create wealth. It simply re-distributes it. When a trader says he has made millions out of forex trading, what he really means is that wealth has been transferred from probably thousands of other traders, over time, to himself because he made better trading decisions on the whole than they did.

Many of the successful traders in Forex work for large banks or other financial institutions, and have millions of dollars behind them. They can afford to have massive stop loss levels, so they can ride the volatility of the market. They can weather large potential losses before any given trade veers back on course and becomes profitable.

The few successful traders who trade purely for themselves also use massive stop loss levels and trade over a period of several days to several weeks per trade. They follow the trend, once it has been established, take a safe slice of it and exit the trade usually before the trend ends. They average a sober 30 per cent profit per year.

30 percent is in fact an excellent return. Where else can you average 30 per cent on your investment? But contrast that with the extravagant claims made by people selling you online currency trading systems and you’ll begin to see my point.

Most people selling Forex trading systems are affiliates who know little about the Forex market. When they write their own stuff their ignorance shows. I’ve just read an article written by someone selling Forex systems that says only four currency pairs are ever traded on the currency markets!

The truth is that the Forex market is like a headless chicken on steroids. It’s the most erratic, volatile and most difficult to predict market of all time. Logic doesn’t come into it. Prices of currency pairs seldom go up or down in a straight line. If all the indicators say the price has to go up, don’t be surprised if it jumps up and down by two or three points at a time and then dives further down by 50 to 100 points before going up.

It happens all the time. The big traders, whether corporate or private, who have millions backing their trades, can shrug off this volatility. But if you’re day trading with a currency trading account of only a few thousand, and a stop loss level of no more than 20 or 30 points (as recommended by most Forex trading systems) then you’re toast, time after time.

No doubt this isn’t what you want to hear, but it’s the truth. But don’t despair, because it actually is possible to make steady profits on the financial markets, though not by day trading Forex. Stocks, bonds, indices and commodities may not have the razzmatazz of Forex, but they have the means whereby the ordinary trader with limited capital may safely trade for regular profits with minimal risk.

Some traders have made millions from doing this, and at least one is willing to divulge what he does, so you can copy him. No, it’s not me (though by following him I have made good profits), but, as they say, I know a man . . .