In our recent series on Forex Trading Methods, we’ve talked about how to identify the elements of a good system. Today, we want to share with you why most of the systems out there don’t measure up to our guidelines.

First and foremost, many of the forex trading systems a forex trader will find are incomplete. They’ll contain hours and hours of theoretical filler, but rarely, if ever, a step by step guide for using the method to succeed. If a forex trading method doesn’t provide a clear, specific guide for implementing the method, the forex trader is likely to fail in using it.

Second, many of the systems out there pay only passing attention to the importance of risk management, or, they provide no coverage of the topic at all. If a forex trading method does not provide specific risk management guidelines, it should be abandoned immediately. Furthermore, if the method or system does not touch on risk management then forex traders should avoid it as such a forex trading method will leave all risk decisions to the trader — this is a recipe for disaster.

Third – too many systems are based strictly on fundamental analysis or news-based trading. In most cases, forex traders will fail with such systems because they are not capable of trading to the minute, understanding the depth of the fundamentals or predicting how the markets will react to fundamental changes, or news reports. This puts too much risk on the shoulders of the forex trader.

Day trading — almost every method and system out there will require a forex trader to day trade. Casual forex traders will not succeed at day trading because of the time requirements necessary to succeed at day trading. If a system requires you to spend hours glued to your computer, we would advise finding a different method.

Putting all of these together, forex traders will find most of the systems out there meet one or all of these negative guidelines. Unless a trader is a day trading professional, we believe most traders will fail if they use methods or systems that meet the items we’ve discussed here.