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The Amsterdam Method         .                       Home page ~ e-mini futures and forex signals                 


Why this trading method is different:

- I developed the Amsterdam Method from over twenty years of trading experience in forex, futures, and options. This includes work in major exchanges, brokerage firms, and on trading floors in Chicago, a major financial center. I have traded alongside or worked with some of the major names in the trading world.

Some of the other 'trading systems' being advertised are often put out by salesmen with little trading experience. Others are small-time traders with no industry experience, located in distant towns, who have probably never seen another trader, in person, in their lives. I've watched these vendors multiply like viruses over the years.

- The Amsterdam is a new method based on actual trading experience, designed to help you make a living from trading.

However, some other vendors are offering recycled information from old trading books - it may be good information, but not new, and certainly not worthy of a high price. And others are selling abstract math formulations found by running old price data on a computer, and calling it 'trading software'. Still others are selling material that works on 'paper', but is unusable in real trading. And others are really fronts for FX trading firms, looking to generate more trading volume - they tend to offer free or cheap "trading courses", with claims of 'easy' or 'simple' trading, and then recommend that you open an account at a particular brokerage firm - the one they are fronting for.


Why "trading software" is not a good idea:

There is a reason why the various "trading companies" and "software companies" are selling the software instead of simply trading it themselves.

The idea that a trader can make a living by sitting back and letting a computer give entry and exit signals is a popular myth. It has been kept alive by trading magazines and websites, and the desperate dream of many traders that they can make trading "easy" or convenient. Experienced traders know otherwise. Software can give trading signals, of course, but what is the long term result of the signals? In my experience the best that trading software can produce is a modest percentage gain over the long term, around the same as a buy-and-hold stock market strategy. To make a meaningful profit you must begin with a very large trading account, and blindly follow every signal given by the program, no matter what. Most people can't handle that. And worse, most trading software produces a win-loss ratio well below 50% - the old "a few big winners, many small losers" approach. A percentage like that can produce a long series of consecutive losing trades. It may profit in the long run, but along the way you can encounter a harrowing series of in-a-row losers.


Many of the top traders and commentators are either here in Chicago, or passed through at some time. I've either traded with them, talked with them, or worked in the same office. I've never met a trader who made steady market profits by letting a computer make all the decisions. I've known software vendors as well. Most of them didn't trade with their own software. Some didn't trade at all. They spent most of their time dreaming up new code, running it on Trade Station with old price data, and if the hypothetical result was slightly profitable, they would give it a fancy name and put it out for sale. A software writer once said to me "...I need $150,000 to trade my new system, it prints money - but you have to trade 24 different markets at a time!". Another one told me "..one of my customers is angry, he said he had to stop trading with my software just because he had 3 losers in a row! I told him you have to stay with the system for the long haul!" But the customer couldn't take it anymore - because this software used stops that were 80-100 pips away!

Computers and the Internet already provide a lot of assistance to trading - electronic exchanges, charting, indicators, studies, price alerts, realtime quotes in the home, online trading, instant order placement, etc. I remember the days when realtime quotes in the home meant hundreds of dollars per month in fees, a yearly contract, and installation of special equipment. I remember when everything had to be done with phone calls - placing orders, changing orders, placing stops, checking for fills, and on and on. There were no computerized chart graphics at the touch of a button - if you wanted intraday charts you had to draw them yourself. Be glad that we don't have to trade under those conditions anymore. Asking a computer to also trade for you is asking too much. Look at it this way - modern technology can help you in your day job, but can it replace you in your day job? Well, trading for a living is at least as complex as your day job, probably more so.

To make a living from trading you will have to look at charts and
make decisions. Forget the computer programs.

(The views expressed on this page are opinions based on the personal experience of the author.)


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Disclaimers:

It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results are not necessarily indicative of future results. Examples presented on these sites are for educational purposes only. These set-ups are not solicitations of any order to buy or sell. The authors, the publisher, and all affiliates assume no responsibility for your trading results. There is a high degree of risk in trading.

NFA Disclaimer: Hypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any trading program. One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In
addition, hypothetical trading does not involve financial risk of actual trading. For example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all which can adversely affect actual trading results.

CFTC Disclaimer: "HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE
UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY
ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN."


 
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