I am currently trying to establish a day-trading system for myself. I am not yet in a position to confidently create a system of my own so I am looking around on different forums and websites. The problem is that it takes a lot of time to test a system to find out it’s win/loss ratio. So i’m wondering if anybody knows of a trading system which has been tested and has a steady success rate of 60% or higher, over a decent period of time? If you know of one I would love to hear about it. If 60% success rate isn’t possible then I apologize for the stupid question.
A successful trading methodology is much for than just a system itself. You need the psychology and the money management behind it. If you’re looking for a system, a simple google search will lead you to literally a hundred or so different types of ways to trade.
But to answer your system I do recommend Tymen’s Japanese Candlestick trading method.
I have no experience with Forex, but logic tells me that if such a system existed, it wouldn’t work anyway because too many people would be using it. The whole idea of making money in the markets is doing what others are not doing since it is a zero sum game. We can’t all win. Most of us have to lose in order for the game to be profitable to anyone. The existence of such a system would mean that we would all win, which would mean that no one would. Trying to game the system on a minute by minute basis can’t possibly work long term. Whatever you make one week, you will lose the next. Minus the spread for a net loss. The only way to make money without eventually losing it is to study the fundamentals and make investmests based on known economic factors. That requires a long term approach and patience. Read the news daily.
If you really believe what you are saying then I don’t know what your doing on a Forex forum because there is no way you will ever be profitable long term. What if I changed my original post to 51% success rate? Could a system like that exist. It’s basically the same thing. In your post it seems, correct me if i’m wrong, you are saying that a system with more than 50% success rate can’t exist without destroying the market because everyone would be successful. If that was the case then nobody could ever be profitable long term. See even with a profitable system there are many, many people who can’t turn a profit, whether it’s due to lack of discipline or bad money management. Also, a huge amount of Forex transactions occur for reasons other than investors trying to make some money. Regular international business dealings have a powerful affect on the Forex market. The fact is, the Forex market existed as soon as currency came into existence and therefore does not need us small time investors in order to exist. And the market does follow patterns, even on the short term which means, with the right system, you can give yourself a slight edge and ultimately profit in the long run. In my opinion, trading economic factors is too close to trading on gut feeling. Because the market does follow mathematical patterns, using probability and money management you can actually, theoretically, guarantee long term success without fundamental analysis.
I have to agree with ttbisco. Finding a profitable system is a very small part of your success.
I’m sure most of the 95% of traders that fail had profitable systems, they just didn’t have the knowledge/discipline to follow the system and to use good money management. 
I thought most of the market was not people trading for profit, but countries and governments buying and selling and importing and exporting ect. like when a country has a reserve of currency which they want to increase or decrease they would float it onto the market a few billion at a time
You didn’t understand my post. There can be no proven system for making money long term other than following the fundamentals. Even then it’s still gambling. Trying to time the market with some magic system is a fool’s game. There are lots of guys selling systems and they make their money off of selling you something. If the system really worked, they would all be trillionaires, which would be impossible anyway because it’s a zero sum game.
[I]According to the Wall Street Journal (Currency Markets Draw Speculation, Fraud July 26, 2005) "[B]Even people running the trading shops warn clients against trying to time the market.[/B] ‘If 15% of day traders are profitable,’ says Drew Niv, chief executive of FXCM, ‘I’d be surprised.’ "[/I]
I understand your post, I just think you’re wrong.
Using technical analysis and trying to “time the market” are not the same thing. I don’t time the market at all, but I use 100% technical analysis and I completely ignore the fundamentals.
What is your definition of “long-term success?” I’ve been successful for 2 years now and have made quite a bit of money in the forex market. 
Like I said before, having a winning system doesn’t make someone a successful forex trader. A forex system is just a tool for the trader. You need a good one to succeed, but just having one does not guarantee success.
Think of forex trading like golf. Having a good set of golf clubs is a requirement for being a good golf player, but just owning the clubs won’t make you a pro. You still have to know how to use them.
Your post assumes that if by some miracle a lot of traders flocked to the best methods, and then executed them with the needed experience and were successful, that there would be no money to go around.
This is simply not the case. The best methods in rely on following the trends. The trends aren’t driven just by random numbers or bank choices or news. The trends are largely driven by people, by all the trading and traders involved.
The more people think a trend is going one way, the more that pile on. This adds feul to the trend and it goes further with more volatility and momentum.
So, if all the traders of the world flocked to the best systems and were able to execute them, the trends would be even larger and longer.
There is lot more to the liquidity of the forex market than just traders, and certainly a lot more than retail traders. All of the retail traders of the world could have methods with exceptional win rates and there would still be more than enough liquidity to pay everyone.
Lets just say you had a purely mechanical method, that only entered and exited when x, y, & z happened, AND that you have proven that it wins 9 out of 10 times. BUT, it can’t be coded into a robot it has to be executed manually by a person.
If you give that same method to 100 different traders, the results would all be different. Why? Because of the many factors humans would add from basically being human, would dirty up the method. Only the most disiplined of traders would be able to reproduce your results, even with exact detailed instructions.
Fundamentals can move the market. Sure.
Psychological factors in price can move the market. Sure.
Technical analysis can see both and respond accordingly.
I believe phil and I have similar styles of trading. I could care less of what is happening in the world. What happens outside of the charts is visible on the charts. When a move a happens, I don’t need to “time it” to take advantage of the entire move. All I need is a part of the move. And that’s been enough to continually make me success in the market.
Exactly!!
Look no farther than my Sunday Breakout thread and you’ll see this in action. I have years worth of data on that thread that shows the system is profitable if traded 100% by the rules, yet people continuously freak out because of a price retraction, cut their winners short, and end up losing money in the long-run.
Emotion is what causes people to lose, plain and simple…
You misread my post. If you re-read it, you will see that I was trying to say the exact opposite of what you thought I was saying. People always say, “it’s a zero sum game” so you can never really win. It is a zero sum game, but there are a lot of players that aren’t trading for profit and their regular transactions provide opportunities for retail traders to make a profit. Theoretically, it should be possible for every single retail trader to make a profit, maybe only a small one, but a profit none the less. I also agree with you that if every trader flocked to the same system it would be almost a good thing because of the increased momentum and volatility, and like a said before, not everyone can turn a profit with a profitable system.
Hi pippy longstocking, i believe they did understand your post. I just believe you are banging your head against the “Efficient Market Hypothesis”. Most of the traders here trade technically and all of the information they need, as stated by the EMH, is on the charts long before the fundamentals are out.
I too am banging my head on the EMH, however this is just because i want to learn some fundamentals. :eek:
Exactly, that is why i am trying to incorporate a mix of FA with TA into one my strategies. This in of itself is why it is taking me so long to come up with this type of strategy.
I am trying to evolve several others, however they are just the regular ones of scalping by using PA and trend/range following using retraces and the like.
I think sometimes you can have too much [B]thesis[/B] and not enough [B]tradis[/B] !!
You can philosophise all day about how the market works, study this hypothesis and that …osis or …ology.
But in the end, your work is of no practical use. 
Just trade!!
And while you are at it, make some pips!! 
Some theory is necessary, like money management.
Other than that, staying practical wins the day!!
Well, on the second Friday in October 2008 there was the real possibility that you would not have seen your charts the following Monday.
That was the day when FED and BoE had to guarantee ALL money market funds in NY and London in order to prevent a mass exodus out of global money markets.
Also on the weekend of the Lehman collapse in September 2008 NOBODY knew what would happen to global markets because of counterparty risks and complex cross trades involving commodities, currencies and equities.
It was later revealed that a bust of cross trades involving the YEN, FTSE 100, GBP and Oil would have caused some real damage to global markets.
It might be a little dangerous in these uncertain times not caring what’s going on outside of your charts. 
Quite right!
That’s why some become economy Nobel Prize winners and others become trading millionaires - thesis and tradis are not closely related!
Hi, guys
In reading this thread, I noticed that it was pointed out three different times (by ttbisco and by simonjf77) that most of the trading which occurs in the forex market is done by players who are not speculating for profit.
Even though this point has been made three times, the folks arguing about a “zero sum game” don’t seem to have factored this point into their arguments.
Back in July, Currency Trader Magazine ran the first of a series of excerpts from Marc Chandler’s new book,
Making Sense of the Dollar (Bloomberg Press, August 2009). Here are two paragraphs from the Currency Trader excerpt which reinforce the point made by ttbisco and simonjf77:
"It is ironic, but prices in the currency market may not be set the way we might assume they are, with profit-maximizing buyers and sellers duking it out over them. That’s because many, if not most, of the folks trading those trillions of dollars every day are not trying to maximize their profits in the foreign exchange market. They simply don’t see currencies as an asset class - as an opportunity for profit - but rather as a risk that needs to be hedged, a cost that needs to be made certain, or a transactional vehicle needed to purchase another asset, which is more likely what they are trying to maximize return on.
“The subset of foreign exchange market participants who view the forex market as a potential profit opportunity appears to be rather small. It is largely limited to speculators, hedge funds, and dealers and proprietary traders at banks. Although foreign exchange trading can be very lucrative, banks typically may not make as much money outguessing the market as one might imagine. Instead they make money the old-fashioned way, relying on the spread between the bid, or purchase price, and offer, or sell price, and access to superior and private information, such as what their clients are doing (that is, the order book).”
I was unable to attach a .pdf of the July 09 issue of Currency Trader Magazine, because it overruns BP’s 20MB size-limit for
.pdf attachments. So, I have attached the full text of the Marc Chandler excerpt as a text document (see below).
Currency Trader Magazine is a free, online magazine for forex traders, and I recommend it. You can subscribe at
Currency Trader Magazine: Welcome
Clint
Since you asked for corrections…
Drawdown has nothing to do with your account size.
You can have a 25% drawdown on a $1 account, or a 25% drawdown on a million dollar account. 25% is 25% no matter what your account size.
You are not any more or less likely to get a margin call due to drawdown just because of your account size.
Hello,
Are you still looking for a systematic trading system? I have developed such a system that is based on moving averages and is very reliable and accurate. I can teach you my system.