You can find numerous system on the market these days, some of which are used by professional traders around the globe and a large number of these systems have been made available to the general public. A system that can bring in millions for one trader, can just as easily make another one loose a lot of money.
There are 2 reasons for this:
- The person trading with the currency trading system is far more important than the system itself (an good trader can profit with a mediocre system, whereas a bad trader cannot profit with the BEST trading system in place)
- If you blindly follow someone else’s system without doing any research is not the same as someone who develops and thoroughly researches and then starts trading. The person who builds the system from scratch is very likely to trade profitable, than someone who just copies the entry and exit strategies without studying the fundamentals of the system
Background of the trading system:
The development of the complete currency system is based on the understanding that forex is very unique amongst the financial markets and it should be approached as such. Probably one of the predominant reasons why most amateur forex traders lose on a consistent basis, is that, they try to trade in the volatile forex market the same way one would trade commodity such as gold, oil, wheat or stocks.
The forex market is unlike any other market in existence. There are some similarities with some other markets and that makes a lot of amateur traders believe it is the same. The truth is, forex is different under the surface, and if don’t develop a deep understanding, you don’t stand a chance with any system.
Lets take an example:
The 8 major currencies are: USD, GBP, EUR, CHF, JPY, CAD, AUD, NZD. That means that right of the bat, we have 8 DIFFERENT markets to consider. Each of those currencies and markets are unique with the economic conditions being their own. Some are importers, some exporters, some have low or high interest rates, some have a boom, while others are in a recession.
All of these currencies and markets are thrown into a pot we call forex. Furthermore, these 8 currencies make up 28 DIFFERENT pairs which again are unique. Can you see the complexity?
The logic behind trading system:
This refers to the point that real professionals trade the forex market, while amateure simply engage in it. At complete currency trader they trade the full spectrum of the market, taking into account, all of the components and parts, while amateur traders trade isolated segments of the market. That is the illusion that the currency pairs are small markets by itself. WRONG!
If you look at the example of the EURUSD pair. An amateur trader might think that trading that pair is trading a single instrument. This is also know as simply “buying” or “selling” the EURUSD in the same way you buy commodities. That is a simplistic view and won’t get you far.
The EURUSD pair is just a reflection of how these two large markets are performing – just a snap shot of how these two are performing if you put them next to each other.
You cannot tell how the market will move if you are just looking at the EURUSD pair.
Why the system works and why it can be trusted:
“It is based on reality” – James Edward
All the trading decisions and concepts behind the system are based on facts, such as:
- Market Microstructure
- Mechanics of the Market
In other words, things that actually mean something.
Prices only change for 2 reasons: limit orders are removed from the market or limit orders are submitted to the market. There is nothing else that can result in a price change. These limit orders are submitted or removed as a result of demand or supply for currencies and that is why a price changes. This is a fact that can’t be changed!
James Edward and his complete currency trader course follows trends and exploits momentum. Everything is based on real principles which naturally manifest in a marketplace. It is all about taking advantage of consequences which are already part of forex trading. Trends are likely to continue than to reverse. This has nothing to do with theory but the core, factual understanding of why prices are likely to move towards least liquidity and the momentum becomes self-perpetuating with the imbalance of demand and suply.
The trading system simplified:
- Identify an supply and demand imbalance in a currency
- When other trader become more active in that currency – enter the trade
- While the immediate trend and momentum continue – stay in the trade
- Exit as soon as the move has finished and PROFIT
Although this is a really simplified version, it does paint the basic strategy.