When you combine leverage with the magic of compounding - the results are astonishing. A $10,000 account that produces a mere 3% profit per day will be worth over $7 million in a year.
This is the allure of Forex: Leverage & Compounding. However, to make it work requires discipline, persistence and a plan. Profits such as these are not produced by treating Forex trading as a hobby. Actually quite opposite is true. Half hearted efforts will leave you disappointed and most likely without capital. Leverage is a double edged sword, it cuts both ways. It can work in your favor or against you. When it goes against you it usually is quick final.
The key is to master the use of this double edged sword and use it with skill. Fortunately this can be taught just like any other skill. It requires discipline and commitment, both of your time and money. However the end result is worth the exercise.
Are All Systems The Same?
Yes! That's the short answer. They are basically either momentum or trend variations. There is a great deal of pseudo science and complicated algorithms that go into justifying a particular method as a rule of thumb. The more complicated and harder to understand a method is the less likely is the probability that it will work.
I can use up a lot of writing space with complicated arithmetic and what seems to be undoubting equations. As said earlier it will not work. By the time you figure out that it doesn't work I will have several other variations to further confuse you.
Does this mean that all those systems are useless? Of course not! Consider them as tools to be used. In skillful hands they can be very useful and profitable. Once again the onus shifts to the trader and not the method. A disciplined and skilled trader is able to use any method or system to his advantage. That's what we were talking about before using systems that you are comfortable with and understand to gain an advantage.