How To Trade Using Mechanic Approach? Part 3
Important point in trading using mechanic approach is trade prevention on the curve-fitting system. Almost each system is under its influence to a greater or lesser extent. That minute when after testing of the idea you alter it for reception of the best results – you run into an adjustment sin. The more you work over the system for reception of the best results at return testing, the less possibly that your system will give profit in the future.
To inexperienced traders it is very heavy for understanding and accepting. They expect that the method well working in the past will be as well working in the future. Profitableness in the past not adjusted under historical trading systems only approximately corresponds (I underline it only approximately) profitableness in the future. By the best method effectively to resist to system adjustment under the historical data are to be convinced that your system works in many markets with the same parameters. Successful system traders use the same parameters of systems in the different markets without looking that it seems unnatural.
But don’t expect from system that it will trade with profit all markets and all time windows. It doesn’t happen. I trade the system in 14 markets, using the same parameters. Further, if the system yields good results on a considerable quantity of the markets, it is completely not obligatory that you traded it in all these markets for a diversification. You can have ten trading systems, each of which was profitable in 15 markets within last six years, and to use each of them for trade only in one market. It will allow you to trade 10 diversified markets using on each of them system without adjustment. Theoretically it is acceptable not less, than trade of one of these systems on all 10 markets.
As to me I am not anxious by searches of perfect system. I want to trade the good system, adequate system that means not adjusted system.
One of the greatest errors into whom sellers of the software enter is that you can become the successful trader with the minimum capital. To sell the trading rates, they declare that you can make the capital with any accessible to you money. The majority of sane experts agree that there is a minimum below which the success is determined by good luck.
I consider that this minimum is equal to ten thousand dollars. Below this level it is almost impossible to use competent principles management of risk. Studying of this question has shown that the success is directly proportional to the capital which you got. To increase your chances of success, it is better to have at least seventy five thousand dollars. My best mechanical system for small accounts demands at least fifteen thousand dollars for the conservative approach with a portfolio from five markets. Without small good luck, trade by means of this system can demand unusual patience just to wait that the statistical superiority of system has had an effect.
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