2. Curve and Optimization
Another indication of a currency trading system that is a scam, is one that involves curve fitting, or optimization. These systems give a fantastic performance in back testing because of the tweaking of the system rules, to make them fit the data, and produce profits. A trader once likened this to shooting holes in a barn door and then drawing circles around every hole to make each shot look like a bull’s eye. Let’s face it, we would all be millionaires if we had tomorrow’s news today but we don’t. Avoid any system that offers unique rules, or many variations for trading different markets. If the system is based on solid logic. it should work on any trending market, and should not be optimized, or curve fitted to an individual market. You will never see a hypothetical performance that fails! Most unscrupulous vendors achieve great performance by making the system fit the data and this causes the system to fail in real-time trading.
Here are 4 tips, to help you separate the scams, from the good Forex currency-trading systems: