PERFECTION DOESN’T EXIST IN FOREX, GREATNESS DOES

You might have found the perfect trading system for you – and it has been performing well. Then, all of a sudden the market volatility dies out and your system starts performing really badly. You’re caught with your pants down wondering what happened.

You may start to wonder, has your trading system reached the end of it’s life? Because this once great strategy now seems as useless as an ejection seat in a helicopter.

I know you’ve felt this way before, and it may have even caused you to give up on your trading system. When traders abandon their once great systems, they start ‘Pogo sticking’ – hopping from strategy to strategy trying to find something that works again.

Well, before you do this, what you’ve got to remember is that the market is a dynamic place. There is no such thing as a ‘perfect trading system’ that is going to perform well all year round regardless of what the trading conditions are.

Most forex trading strategies will rely on the markets to be moving to perform – price movement is the life blood of any trading system. When momentum dies off, and price movement becomes ‘choppy’ – most trading strategies will fail.

Some traders may not actually abandon their system, but will try ‘tweak it’ them to perform better in choppy, sideways conditions. This is called curve fitting – changing parameters to ‘optimize’ your trading system around a specific set of price action.

The problem is, the trader may be successful in ‘re-molding’ the system to work better in the choppy conditions, but have totally ruined it for the better trending conditions that they originally designed it around. This will generally lead to missed opportunities in the more lucrative trending markets, bringing on more frustration, and repeating the optimization cycle again.

don’t fix something that is not broken
How do I know this? I’ve been caught up in over optimizing strategies in forever changing market conditions, and have also seen many other traders become victim to this broken mindset.

This is especially true for people who design their own trading robots, they are continuously recoding the damn things to try make them work with the current conditions.

It is a hard cycle to break, and it’s much better to try keep trading simple – realize that it’s not your trading system letting you down, the fruit of the market is just not ripe for the picking yet.

If you find that the market easily makes you really angry and you always seem to find yourself in a constant battle with the charts – then you really need to focus on becoming more disciplined rather than focusing on a trading strategy.

No trading strategy is going to work for you if you can’t keep your cool.


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