The downside of Trading Systems  

In theory, trading systems are meant to be mechanical and objective meaning that they should remove any shred of intuition from trading. One should follow a set out system by buying and selling when the system dictates to do so. The only problem with this logic is that there are only a few good trading systems that exist. Furthermore, some systems which were created are only advantageous for specific institutions in order to capitalize on opportunities, or include complicated derivative strategies. These specific strategies are not tailor made for an average trader.

Two different types of Forex trading systems exist. They are mechanical and discretionary systems. Trading signals generated from mechanical systems come from the systematic application of technical analysis, whereas experience intuition and judgment on when to enter and exit are more prominent in discretionary systems. Lets take a closer look and describe the fine points of each system.