Trading System: There are a number of strategies and trading systems. Many of which are free and published articles on trading, magazines, books and websites related to trading. You can buy them as software or you can subscribe to them periodically.
Novice traders say they do not have the time, skills, talent or brains to find the method how to operate properly. They’ll buy a program or subscribe to a trading system that will cost them hundreds – or in some cases – thousands of dollars. They not want to do anything just to be informed of what to negotiate, when to buy and how much they need to buy. Some ask me if this strategy or method is recommended for trading in financial markets. To answer this question, then I am obliged to consider advantages and disadvantages of using this approach to trading.
There are certain reasons why traders prefer to use a system or strategy developed and approved by another person:
A novice operator does not need to learn how the market works and how it interacts with this market. No need to educate yourself: no need to bother with books and seminars. No need to test the system, since the seller has done and reported promising hypothetical or actual results.
Risks related to strategy or trading system developed and approved by another person are:
Many defective systems. They may be faulty because their assumptions and their mechanisms can not be true, accurate or valid. As a novice trader, how you can distinguish between good systems and damaged if you do not know how trading systems are built?
All systems have drawdown periods. Good systems can not make money for six months or a year. Although it was a good system, can you follow when this system only leads to losses? How you can follow when there is no trust? How can you trust this system if you do not know the ins and outs of the system and if it has not proven itself?
I do not think people can blindly follow a system, even if they were told that would bring them wealth. I can give someone a trading system, I can communicate hypothetical or actual exceptional results and still not be able to follow.
I remember how my father gave totally mechanical trading system I had developed. I told some simple rules and said not question them. All he had to do was follow. We two were using this system for two months, and my small account grew by about 50% (became a good two months), but he was missing. My father did not understand why. I asked him to show his trading records. When I looked at their records, I found that was disobeying the rules. When I asked why he disobeyed, he wanted to improve outcomes after losing a couple of their trades. He was trying to improve their results. According to him, the system asked him to have done what in his opinion was not correct in certain market conditions, so it did not follow. I found the too simple errors, such began operations at market price instead of waiting to buy and sell stop orders at support and resistance levels. I also asked to run operations at the end, but often he operated two hours before or after closing at its discretion. There are many more rules that failed to comply. He is an intelligent man, a former civil engineer and now manager of a large organization. Why not follow the instructions? It is simple. He did not know the reasons why I had such rules and why not appreciated. His money was on the line after a series of losses, lost faith in the system easier because I did not want to develop it and approve it by itself.
To avoid the risks mentioned above, I do not see any method except that a novice trader learns how to develop your own trading system. It is the only way to know if system or strategy is good or not.
Once operator learns how to develop systems and strategies can then be better equipped to pass them. At this point you can still understand it better to use your own system, because it is increasingly difficult to find a more appropriate system to its operating profit targets in their levels of risk tolerance. It is likely that once you reach this level of competition, will buy other systems only to analyze, have a few things you like and add them to your own system. In my view, the irony is that for a trader to know which system you can buy, you must first learn how to create a system. And after finding how to create a system, and never have the need to buy it.
In conclusion, I have to say that if you are not willing to learn how to develop your own trading methodology, then maybe you should think about giving your money to someone else to invest. Give it to someone who is operating the system developed and approved by itself because it is more likely to have the confidence and courage to follow their own set of rules.