What systems actually work?

[Jaketrader]

Originally Posted by Maji

This is my take on what systems work in forex. I am only concerned with mechanical systems, so my reply will reflect that. There are many successful discretionary traders out there, but I am not comfortable trading discretionary methods and so won't go there. The two strategies mentioned below is best used as complimentary ones to smoothen out the equity curve.

1. Breakout Systems based on trend trading strategies - pivot breakouts, hi-lo breakouts etc. These systems have long periods of drawdowns, and one has to be adequately capitalized to withstand that. SIBKIS is a strategy that falls under this category.

2. Cost Averaging Systems based on Counter Trend Strategies - Most market makers trade this way. The stop losses are wide and the targets are small. This needs a cast iron stomach and an extra deep pocket. There is a method sold on Ebay and mentioned by Jasperforex that is a variation of this method.

A combination of the two methods is a happy medium in my mind. It won't make you a millionaire overnite, but should work out good in the long term. Anyway, proper risk management and position sizing is the key to success in my mind.

Hope this was of help.
Maji

Maji You have nailed the nail on its head, slow and steady wins the game not instant millions systems