Beware List for Newbies

[Toccata]

www.forextechniques.com - NOOSAFX states that the system produces false signals. Doesn't sound much like a reliable system - how do you know whether a signal is false or not?

[Searcher7]

Hi Toccata,
It is impossible to buy a system that generates 100% winning trades.Occasionally,there are going to be trades which go sideways for hours because of a lack of news to move the market or because of divided opinion- a struggle between the bulls and the bears.Also a few trades will go against you if the market has reached a trendline or other significant target and you weren't aware of it.What I like about the ebook noosafx is referring to is that it explains where these targets areas are.

[Toccata]

Its good to know that there are others effectively using the system and I trust making good profits?

My point was that if you are trying to use a system but then apply emotive decisions as to whether to 'trust' a signal, then the system is not a system! e.g. if you cannot mechanically follow it and intuition takes over, then you are using your experience as a trader over and above the signals that the system generates. I am well aware that you will never get 100% reliable signals.

[noosafx]

I do not believe that a system needs to be purely mechanical/robotic to be a good system. Trading is like driving a car, where if you mechanically followed the rules to the letter you would soon have an accident. For example if the law says you have to drive on the left hand side of the road, and there is a stationary car in front blocking your side of the road, what do you do? do you blindly hit the car or drive round it on the wrong side of the road? bending the rules for the sake of minimising damage/loss. Trading is the same , to have a "system" that covers every posibility would make it too complicated and useless, and this is where you need to make a smart decision, use the system as a guide but also take on board the other factors. Since I have adopted this type of trading my profitablity has increased dramatically. I have less losses and more winners. But this has been only achieved by researching, and one of the sources was the ebook "Guide To Profitble Forex Day Trading"

Where this e book is different from others I have read is it covers a broader range of topics. Its not just a system its also an education.

As searcher7 said there is no system or metod that is 100% successful, every system has its flaws, but by trading smarter you can mininise the effect of them.

[kwalta]

To go back to the original subject of this thread...Would anyone care to explain what's meant by "slippage?" I see this tem used often but failed to find its meaning in the glossary.

Thanks,
k

[noosafx]

Slippage is basically the difference between the requested price the the received price. For example if you have a stop on the Euro at 1.2200 and the stop is executed at 1.2210 , the slippage = 10 pips and can be either in your favour or as in most cases against you depending on your broker.

[kwalta]

Thanks, noosafx, for the explanation.

I've got a few more questions, though: What causes slippage? What's a positive slippage (as opposed to a negative one)? How does one deal with slippage?

k

[noosafx]

Hi

Positive slippage is where the slippage is in your favour and negative is where you loose money. How to avoid it , the only way is to get a good broker , I have found FXCM very good and would not touch GCI or Money Garden and I have had huge slippage problems with them