All about investment

It seems that everyone wants to bombard you with his or her favorite Forex trading these days. There is obviously some need for a systematic method of evaluating these various systems. The alternative would be rather chaotic and expensive.

There are ways to technically evaluate a Forex trading system, but these often go beyond the skills of many beginning traders. How does someone with limited technical experience go about evaluating the claims and/or effectiveness of the various systems that are presented?

While not entirely conclusive, I believe that a useful evaluation of a trading system can be done on a non-technical basis. And in fact, it is the first evaluation that I do, before I look more closely at the technical aspects of the system. After all, I don't want to waste my time if there are obvious problems that show up in this initial evaluation.

The first thing I look at is the presentation of the trading system. If it is presented through a web site, does the site have a professional appearance, or does it look like an amateur who couldn't be bothered to pay attention to details threw it together? I also pay attention to the grammar and spelling on the website as well as any other advertising materials.

Now that may seem petty and unfair. But if the grammar is poor, and there are misspelled words, it is another indication that there was not a lot of attention paid to detail. That fact could indicate problems with the actual system being presented.

Next, I evaluate the credibility of the claims that are made concerning the system. One of the ways I do that is by looking for any disclaimer or admission of fallibility on the part of the system designer. It is not only the presence of a disclaimer that is important. The quality of the disclaimer is important as well.

I saw one web site that claimed I could make 20% or more per day, and they all but guaranteed that fact. There was no sign of a disclaimer. There obviously was a credibility problem, and I never gave their offer a second look. Evaluating credibility is definitely an important step in the overall evaluation process.

After all that, I look for something that indicates the basic premise that the system is founded on. I don't expect a developer or vendor to give away their whole secret at this point. But if a system developer or vendor is willing to reveal their basic premise in even a limited fashion, that is a good sign, in my opinion. And then I ask myself if their premise makes logical sense. If it is something that makes logical sense to me, then I am willing to look even closer.

I once saw a trading system that was based on the premise that the markets move up and down along with the cycles of the moon. Now that is an example of a system that makes no logical sense to me. I do not mean to offend you, if you believe that the moon has anything to do with the movements of financial markets. But I would not be comfortable trading a system like that, because the underlying premise is not logical to me.

Those are some of the ways that I evaluate a Forex trading system on a non-technical basis. While this method of evaluation is not 100% conclusive, I find that I generally do not go wrong if I follow my gut instincts with those questions in mind.