When people think about Forex, the images that come to mind are akin to something out of a Hollywood movie: a high energy environment of fast moves and big profits. Even when you’re using automatic Forex trading systems, the tendency is there to look for systems that have lots of trades and lots of winners. While a system that trades frequently can be exciting and even fun to trade, what you may not realize is that your system’s frequent trading may be costing you thousands of dollars in lost profits. By the end of this article, you’ll understand why when it comes to automatic Forex trading systems, trading less is often more. So read now in order to gain more profits tomorrow!
The Downfall of Scalping Forex Trading Systems
The truth is, trading is one of the most mundane and unexciting thing to do if you’re doing it right. Excitement and fun comes from uncertainty: you take a trade and you hope that it will be a winner, but you don’t really know where it’s going. To me that’s not trading, it’s gambling. Real trading is run like a business, with automated processes in place to collect pips from the market, and you know roughly what to expect from your automatic Forex trading system in the long run.
That said, automatic Forex trading systems can’t completely eliminate the need to feel the rush of trading Forex. Subconsciously, when you choose a system that trades very frequently and has a very high promised percentage of winners, you’re indulging that need for a rush. After all, we all love to win and especially to win a lot. There’s even a special kind of system called Scalping Forex Trading Systems that cater to the need for many winning trades.
Scalping Forex Trading Systems typically trade very frequently, often between 10-20 times a day and even more sometimes. They aim to collect 5-10 pips in profit at a time, and are often in and out in less than an hour. This constant turnover creates a string of many profitable trades in a row, which is exactly what Forex traders like to see. The catch though, is that when it loses, and believe me it does lose, it will often lose 100 pips or more. That means that you could have 10 winners and just one loss, and you could still be net -10 pips for your account.
Why Trading Less Is More In Forex
Having an automatic Forex trading system that trades frequently also means that you pay more in spread to your Forex broker than if you used a less frequently trading system. The spread costs add up to thousands of dollars in the long run, so with a system that trades frequently you’ll only be making huge profits for your Forex broker, and not yourself. An automatic Forex trading system that trades less is to your benefit because you’re saving a significant amount of money in spread costs, and keeping more of the profits for yourself.
If you’re looking for an automatic Forex trading system, then you’re better off with ones that trade less frequently, and aim for more profits on each trade. Of course, your winning percentage will decrease, but your profit per trade will increase and your loss per trade will decrease. That means that you won’t run the risk of blowing days of profits in one losing trade, and have a much more stable return on investment. So, if you want the best automatic trading results, then forget about Scalping Forex Trading Systems and get yourself a system that trades less, for more.