Trading Cuentas

It will be no surprise to hear that the best currency trading systems are the ones which make money! The issue is simply the easiest way to identify which of them those are, and in particular, how to decide which system will be best for an individual trader, i.e. These are the sort of systems that gamblers often call loss recovery systems. The idea is if your last trade lost, then your next is likelier to win, so you take a larger position. However this idea is totally wrong. Statistics disprove it every time. Gamblers lose their shirts on these systems and it would be crazy for a foreign exchange trader to employ a system like that.

So with that rant out of the way, let’s take a look at the simple way to identify a rewarding system. To do that we’re going to introduce the concept of edge. Edge is the measure of a system’s returns over a period. It is a simple calculation but you do need a reasonable number of results to gauge it from. Edge is just the probability of a win multiplied by the average profit on a winning trade, minus the chance of a loss multiplied by the average loss on a bad trade. Results are figured out after subtracting the spread and any other per trade costs.

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