I started trading the 5EMAs Forex Trading System (FTS) beginning of this week on Monday, 08 October 2007. After the first week, the trading account grew by +5.13%. To me, I find that’s an extremely good result by almost any trading standards!

In total, I entered 4 trades and every one of them turned out to be winners. The 5EMAs results page can be found here: My 5EMAs Day Trading Results

Some of my thoughts about the 5EMAs Forex Trading System:

The 5EMAs FTS is a semi-mechanical, partially discretionary trading system. While those looking for a push button profit-making machine may find this a turn off, it does have certain advantages. Advantages like:

More Trading Opportunities

The advantages of a discretionary trading system is that it gives leeway for the discerning trader to adjust the trading system to their style and personality.

More aggressive traders can continue trading set-ups that are “lower quality” if they can supplement their analysis with other methodology. For example, a high quality trade signal would require 4 criteria to be fulfilled, while a lower quality trade signal may require only 2 - 3 criteria.

If a more experienced trader could add in other layers of analysis, the lower quality trade signals could still prove very profitable. This would also allow for more opportunities to trade (which may or may not prove to be a good thing for the less skillful traders).

Long Term Stability and Robustness

With a trading system that allows discretion for selecting which trading signal to take, it means that not everyone who has purchased the system trades at the same time for the same trade.

While the forex markets are definitely liquid enough to accommodate it, the sudden surge in orders may result in the forex brokers having to push the bid/ask spreads wider during moments when everybody is rushing in to take advantage of the trade set-up.

But with a semi-mechanical trading system, the chances of this happening are reduced greatly. Traders have a better chance of getting into the market at decent bid/ask spreads and making trades that end up profitable faster.

Side Note:

While the 5EMAs Forex Trading System may be a semi-mechanical trading system, it does combine strong trading basic principles like trading with the trend, looking for situations when it’s better to stay out of the market, and solid trade management rules.

This means that traders who do take the time to learn the system and understand why it works should do very well over the longer term. But for those who want a push-button trading system, this isn’t for them.

Summary of my First Week Day-Trading

It’s a lot less hectic than I expected it to be. I had to wait a lot before a trade met my criteria, and once I was into the trade, it was pretty much an automatic process of following the trading rules.

In fact, I went out while I had open trades simply because I had already set hard stops into the trading platform. And that’s a good thing for me because I like to have some freedom to move around!
What Next Week Will Bring

Who knows for sure? Something that I learnt over the years is that trading involves handling uncertainty, and if you can’t handle uncertainty then you probably will have a hard time finding success as a trader.

But one thing that I’ve learnt is that trading profitably is truly very simple once you’ve understood the basics, seen enough charts and learnt how to handle yourself mentally, emotionally and physically.

While the act of trading is simple, the process of learning it and the journey to get there does require commitment, discipline and a love for trading simply for trading itself. That is something that many people will find hard to go through, which I suppose accounts why the failure rate is so high.

I’ll close this blog post with the following quote I’ve read:

“I’ve made phenomenal amounts of money for very simple decisions but I was willing to make them. Somebody had to. Others are looking for highly complex ways of interacting with the markets, when most of the time it’s only the simple ones that are going to work. ~
Ed Seykota