The ebook "Forex Trading Machine" is aptly named. The author, Avi Frister, has taken a radical approach to the forex market, bypassing technical and fundamental indicators, the lifeline for many traders, and devised a system that is purely mechanical. If you can trade like a robot his system promises dependable, consistent profits over time.
This ebook falls naturally into two parts. Chapters one to six cover forex basics including an explanation of currency quotes, pips, margins, daily ranges, technical and fundamental analysis.
Of particular importance are chapters five and six dealing with the psychology of trading and money management.
Why A High Drop Out Rate?
A very important point is made on page 74. After referring to the often quoted statistical that 95% of traders fail unexpectedly and go broke, the author emphasizes that this is not due to the absence of a sound trading system, or special forex trading strategy .
Discipline is the key factor, control over emotion. Fear and greed are the two elements that destroy so many traders. To quote Avi Frister: "Most people get into this venture with the hopes of getting rich quick.
Here is the desirability of a forex trading strategy that is purely mechanical, without the need of interpretation or judgment calls on what is happening in the market at any given time. If an individual can develop the discipline to simply follow this mechanical system, basically trading like a robot, consistent profits and an ever growing account will be the result according to "Forex Trading Machine."
From what I have considered in this ebook and put into practice myself, I am inclined to agree.
Three specific mechanical strategies are outlined. One requires a stop loss of over 50 pips which may not suit everyone considering the amount of equity needed for such a trade. These setups come up just a handful of times a month but the profit targets are usually around 100 pips.
The second strategy will suit many with a stop loss of 20 pips and a profit target of 30-40 pips. This particular setup occurs frequently, perhaps more than once a day on some currency pairs.
The third strategy requires a stop loss of just 15 pips with a profit target between 20 and 40 pips.
In each case, there are minimal considerations and a trader has to just follow a very specific set of instructions, enter the trade, and forget about it. Check it some time later and if it is still running, make a decision on whether to exit or let it run.
The author points out in the introduction to this ebook that the information and trading strategies explained will suit both the beginner and the advanced trader. Certainly the beginner will find the techniques relatively simple and easy to implement. If they can adopt the robot approach and just 'connect the dots' there is a high probability they will increase profits consistently over time.
It Depends On Your Mindset
For the advanced trader I am not so sure. It will depend on the mind set. Some advanced traders may not be able to shut off their natural tendency to use technical or fundamental analysis. This will most certainly get in the way and cause problems if they are using the mechanical approach.
Advanced traders who have the discipline to pigeon-hole their various strategies will do well with this system I believe. They may have some trades running using their technical or fundamental indicators and when they see the specific setups Avi Frister outlines, they may choose to trade in a separate account purely using the mechanical method.
The advantage of this approach is a spreading of the risk factor. Using a variety of trading strategies, including technical analysis and on other occasions a strictly mechanical approach, will provide a strong trading foundation.
"The Forex Trading Machine" adds another dimension to the aggressive trader's tool kit.
Title: Forex Trading Machine
Author: Avi Frister
Format: Digital – PDF