Saturday, April 21, 2012

Diversify Your Forex Trading For Success!

Hi all, have you ever heard someone tell you "don't put all your eggs in one basket"? We know this basically means you need to diversify. The same is true when it comes to trading. Many traders are fixed on finding the "holy grail" of trading or a single system that never loses. I believe there will never be such a system and the closest you can get to a fool proof system is to diversify with many different systems. When you diversify with many systems they can all work in harmony and balance out the drawdown periods that will occur with each system. This can take awhile to find systems that work well together, but is highly worthwhile.

To obtain a system that works in harmony we can research the backtests of various systems and choose ones that have different drawdown periods. This creates a balancing act which drastically improves performance over the long term. Alternatively we can track long running forward testing of systems and note the drawdown periods and the type of market that was realized at this time. So let's do our homework on the available trading systems and reap the benefits. Best of luck!