Avoid Hedging Scams
Why Break Even With Hedging?
Grab Forex Profits Like Clockwork
Forex Trading Seminar
Shocking Forex Methods
Watch 9 Free Video Previews from Elite Forex Trading Seminar on Disc
Forex Trading Course
Forex Training Shocks All
Outsiders Still Believe This Won't
Work. Proven Methods for Max Profit
Forex Trading
Hedging is for Losers
Watch 9 Free Eye Opening Videos
Grab Forex Profits Like Clockwork
Forex Training
Fibonacci Cash Machine
Cash in Profit Like Clockwork
Watch 9 Free Astounding Videos
Fibonacci Course
 |
||
FOREX Day Trading - The Dangers of Curve Fitting
In Forex day trading you see many systems that have fantastic track records in back testing, yet they can never match this performance in real time and the trader wipes out his equity. The reason for this is the concept of curve fitting - if you don’t understand its significance you will lose. Many traders buy hypothetical track records, or devise their own by running their signals over past data and any track record in day trading is curve fitted. Why? Day trading by its very nature doesn’t work. You never get a real time track record of profits, so any track record has to be curve fitted to make a profit. So what is curve fitting? It means fitting the trading signals to the data ( you can of course do this on past data as you know the closing prices ) and making sure that the track record is profitable. It’s very similar to shooting at a barn door and then drawing a cirlce around each one, after the shots are fired to amek them all bulls eyes. Of course bending the system to fit the data doesn’t work and profitability is simply an illusion. Examples of curve fitted systems are Ones with lots of rules and parameters, or unique rules and parameters for different trading conditions, or contracts. If you curve fit a system, be it in day trading or long term trend following, it will lose. No reliable data Day traders have to curve fit in hindsight to make a profit, as in real time volatility is random and its impossible to predict price direction. To make money in any form of trading you need to play the odds and you can’t do that in day trading. When you buy one of those enticing day trading systems offering you 100% profits or 70% success rates ask for the real time track record and you won’t get one. The one presented to you is hypothetical and done knowing the closing prices and has been curve fitted. Try and trade any day trading system from a vendor in real time and you can kiss goodbye to your account equity. Don’t fall for the hype of day trading systems see the reality, which is a sure fire way to lose all your money quickly.
|
||
|
||
 |
||
