Forex

Beware of courses that Claim Scientific Accuracy

There are many courses that will tell you they can trade with scientific accuracy - but they can’t. If there was a scientific theory of market movement, there would actually be no market, as we would all know the price in advance.

Forex trading is a game of odds - NOT certainties and any system can lose money in the short term, that simply the reality of trading.

2. Beware of courses that Use Far Out Theories

The king of these is Fibonacci and trading Fibonacci retracements.

The Fibonacci number sequence has nothing to do with trading and if Leonardo Fibonacci were around today (he died in the thirteenth century) he would probably be bemused at the way financial traders have hijacked his theory and applied it to trading.

The theory was originally used to solve a problem to do with the copulation of rabbits and has nothing to do with finance.

Traders present it as a scientific theory for trading but it is anything but – if it were scientific the retracements would work every time and they don’t they work some of the time but you can pick any retracement percentage you like and it will work some the time – but that’s not scientific!

Other similar theories are Gann and Elliot wave, both claim to be scientific but are not – leave them to the far out crowd and dreamers.

3. Beware of The Track Record

Anyone can make up any track record and many vendors do!

Be cautious when you see one that looks to good to be true, as it will normally be accompanied by the following disclaimer or a similar one, read it carefully:

"CFTC RULE 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown".

If a vendor puts this disclaimer on a track record, they can simulate anything they want in hindsight knowing the closing prices. Of course doing this is a lot easier than trading for real and not knowing what they are!

4. Beware of Courses that Promise Regular Income

How on earth can you promise a regular income from a market that’s so un-predictable?

Not even the best currency trading systems win all the time and all will have periods of drawdown and losses furthermore, you can never anticipate how long they will last.

Over the longer term a soundly based forex trading strategy should make money - but in shorter time frames anything can happen

5. Beware of Day Trading and Scalping Courses

Forex day trading and scalping is simply one of the best ways to wipeout your account equity. Volatility in short term time frames is random, support and resistance levels are meaningless and you can’t get the odds in your favor – period.

If you ever see a day trading system that produces a track record of gains look for the disclaimer we have highlighted in point 3.

Avoid day trading systems!

6. Beware of Courses with No Satisfaction Guarantee

Any currency trading course will make claims and give you the benefits it thinks it will give you and that’s fair enough – but the vendor is asking you to believe these claims and you therefore should have a right to have your money back, if the course does not deliver what you expect.

You should look for a guarantee that offers to rebate your money in FULL with no penalties after a trial period should you not be satisfied.