In my opinion, system trading does work but it is for lazy people. If you trade that way then you might as well just program a computer to do it for you which is what is happening nowadays. Also a system can break down and stop working because market conditions might change. For example, if you are trading a range system but we then hit a bull market that keeps going up then you are going to lose a lot of money. It is better to understand what is happening in the market rather than blindly following a system created by someone who is probably not even a trader.
All the highly successful traders have quantified their approach into a set of rules which could be considered a system but they use it more like guidelines. They still use an element of instinct in their trading which is what sets them apart from the rest. Instinct is gained from trading experience and understanding what is happening in the market instead of just following silly rules like buy when the blue line crosses the red but only if the yellow line is below 30 or something retarded like that.
Most people don’t want to spend the time learning how the market works so they just keep searching for the magic system. The salespeople know this so they keep selling people these systems with slogans like ‘gain 1000% a month’.
Mistake number 5: neglecting TIMING.
Some times are better for trading than others depending on your strategy.
Certain times can be especially challenging to make money in the forex market.
These times include the days before, during and after a major international holiday, such as Christmas or New Year’s.
Major bank holidays in the United States, the UK or Europe can also adversely affect trading volumes, often leading to sharp moves in thin markets that can trigger stop-loss orders.
For most traders, the following are among the worst:
The Witching Hour. The loneliest and scariest time in the forex market is when the sun is just rising in Tokyo and traders in Sydney are drinking their first cup of coffee. The time between the New York close and the start of trading in Tokyo has always been a time when investors avoid trading if possible. During these two hours, forex trading volumes can decrease to just 2% of peak turnover. Thus, liquidity is super low. Consequently, the spreads get very high and any transaction completed during that period can influence the market disproportionately. It is during this time that many stop-losses get triggered and flash crashes happen more frequently.
Sunday Afternoon Opening. The market opening on Sunday often carries an element of surprise, especially if a major geopolitical event happened over the weekend. Forex currency pairs tend to gap up or down during the start of the Sydney session. Also, dealing spreads are typically so wide that you would usually be wise to wait at least until the Tokyo opening to get a better idea of what the market is like.
Wednesday Rollover. In the middle of the week, there is a tricky rollover commission that surprises many novice traders. What is a rollover? If you hold a position open on a weekday night, normally your broker charges or adds an interest rate to your account. This interest is called a “Rollover”.
This excerpt was taken from this article.
Happy trading 