September 22, 2009

The Magical Forex System

Final Review 

Right away, I have to say that the title of this system is silly: it is not in any way magical, it is something rather simpler altogether. It relies, basically, on two EMAs and a version of a well-known indicator. There are plenty of systems like this, many of them free on the Forex Factory forum – but this does have some mitigating factors.

I have been reviewing this system for two weeks now but havent reported on it because it has caused mixed emotions in my breast. I have found it quite a confusing system, in that while you are signalled to open trades frequently, there can be so many of them, all inside a particular trend and without any suitable exit points before the next signal, that you can become swamped. In most cases, the suggestions of appropriate stop losses would have had you out on a small retracement, while you should really have stayed in for the greater gain. Due to this aspect and the rather fuzzy exit advice, it is confusing.

There are a number of videos accompanying the ebook but the possibility of watching paint dry is very attractive, in contrast. The problem I have with this is that a complete beginner does need this sort of hand-holding, whereas the more experienced, even an early trader, would really be better off settling for the text advice, though even that isnt completely specific.

The explanations of the method are simple enough – they are extremely simple, no question. My problem with the area which deals with stop-losses and possible exit points, also the reward/risk ratio, is that it is not completely clear and definite. This doesnt really matter that much to a fairly well-read FX person, who has done a bit of learning, courtesy of the various brokers platforms and forum following, but I have to consider how a complete tyro would see them. In this respect, I don’t think they are clear enough guidelines.

Overall, this ebook does perform a valuable service for it’s readers: it shows them how to trade. Never mind that it’s not a mould-breaking method, it is a way to start trading, to get into the feeling of doing it. The biggest hurdle a new trader faces is actually to take that risk, take that first leap and this gives you a framework you can start on. Once you are running and you get used to trading, you can decide how you view your results and adjust accordingly. By his very vagueness in certain aspects of his offering, he does show that trading is not fixed in stone, methods don’t have to be rigid, you can move the goalposts. You might even, pardon the suggestion, think of your own methods! This is more valuable than you might imagine, the expansion of your understanding of trading.

It’s difficult to include a set of emotionless results for this system. There is so much room for individual interpretation that I find it hard to look at the trading results objectively. Having been involved in live trading FX for several years, I find it hard not to use a method in my own way, you cant entirely ignore your experience. I prefer to say that, Yes, this system does do what it says on the tin, it does identify trades according to it’s suggestions and I do consider it a worth-while buy for novice traders looking for something on which to focus their trading. More experienced traders will already have been there and done that as regards this fairly simple system, they will probably already have gathered this knowledge along the wearily trodden path. However, new traders will find this a very useful route, both to some profit and above all, to learning the trading game. That first step on a live trading account with real money is quite hard and this will help you over that hurdle.

So, I would suggest a positive rating for this. While I not shouting about it from the housetops, I didnt have any really negative feelings about it and something which eases the beginner into the game is valuable. I would dismiss the vagueness of some of it, you should be made to think once in a while. It’s a fair cop.

You can get The Magical Forex System here:

Filed under Forex,Spread Betting by Terry Shepherd


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