Forex Day Trading – The Illusion of Curve Fitting
In real fact, forex day trading is very popular and at present there are many systems marketed and sold on the internet. However, you need to become fully aware of an illusion which you need to check when you back test a system or you purchase one. This trick is known as ‘curve fitting’. If you don’t have any idea about it, this article is for you.
If you desire to trade using any system for forex, you definitely check and test it out on back data initially and this is the step that you should exercise extra caution on. The sad truth is that, most traders curve fit, either on purpose or without thinking of the end results.
Curve Fitting – The Illusion
Curve fitting integrates jerking or tweaking the system so the data will fit. A usual occurrence is for online forex traders to stumble upon a system that doesn’t function first time around, so they formulate some parameters and rules to make it work accordingly.
Keep in mind that there is no data sample that precisely mimics itself in the future, and in real time trading the system disintegrates. To recognize a curve fitted forex day trading system, you just have to look for numerous rules and parameters utilized in some cases and distinct ones used in specific trading scenarios.
Day Trading with Forex
Day trading in forex is considered by some people as the easiest way to lose money online. This is for the reason that you’ll experience difficulty in finding investment advice and a day trader with a track record of consistent and real profits, not just simulations. In the internet arena, you’ll see different eBooks and systems marketed and advertised with great copy and alluring track record. However, when you assess the track record disclaimer, you will find out that they were performed in hindsight.
Keep in mind that simulated or theoretical trading performance results have certain restrictions and limitations. Disparate from real performance record, hypothetical results do not in any way represent the actual trading. Since the trading have not been tried, tested, or executed, the results are over or understated for affirmative impact to traders like you. Note that simulated forex trading systems as a whole are designed and formulated with the benefit of perception after the initial positive result.
In reality, you don’t have any advantage in trading backwards when you are on the forex market because you have to trade without recognizing the price movements that make it quite complicated.
Getting Started with Forex Day Trading
So if you are still thinking why forex day trading doesn’t work, it is because the forex market is highly volatile and random. Due to this, resistance levels with the use of specially formulated strategies can be useless. Day trading techniques appeal to novice and naive investors since they find these programs as an easy approach in generating money. What you need to understand is that trading is not so simple, it’s vital for you to note that almost 95% of traders lose their money and in day trading the numbers normally increase to 99% up to 100%. You should only consider a day trading strategy that has real time positive track record of a few years of constant gains.