If you have a forex trading system with a track record of high probability in being profitable, then the odds are already in your favor before you even enter a trade.** **This is true for the trading systems mentioned here i.e. Black Dog System, Forex Trading Made EZ and Leo Trader Pro. Void of fear and greed, if you follow each system exactly, you will profit, if you have no fear and no greed.

This brings us to the rarely spoken truth. Other than omitting trading psychology and risk management, application of most forex trading systems in the forex market is actually a game of odds and probabilities.

Let’s say for instance that we are playing “coin toss.” Theoretically, for 100 flips of the coin, 50 will come up heads, and 50 will come up tails. Of course the first 100 coin tosses may result in 60/40, but the more you play, the closer to 50/50 the numbers will get.

If we were to play for 20 hours, and flip the coin exactly 5 times each hour, and for every heads that comes up, we get paid $2, and for every tails that comes up we pay $1. This should be a profitable system. After our game we see that heads came up 50 times and tails came up 50 times. So at the end of 100 tosses, we have paid $50 and received $100. A profit of $50.

During our second game of coin toss, we decided that we are going to let the flipper (in our case the flipper is the forex market) keep flipping the coin for an hour while we take lunch but we are not going to pay or be paid for those flips. During our lunch hour, heads comes up 5 times in a row. And now we are back from lunch, and we are down $10 for the hour. Now, theoretically the odds of 5 tails in a row coming up after 5 heads in a row are pretty good because for every ten tosses, you should have about 5 heads and five tails. So now we get 5 tails in a row and now we are down another $5, for a total of $15. So not counting the 5 tosses during lunch, this leaves 90 tosses that we still have to account for and let’s say that they were 45 heads and 45 tails. Our profit for these tosses is $45 (45×2 minus 45×1), now if we take away the $15 for the tosses we didn’t take, and that string of losers, we are left with a profit if $30. So lunch and 5 lousy spins cost us 40% of our profits.

Now the abovementioned only describes theory but it absolutely applies to this market. If a forex trader is picky about which trades he wants to take or not, he is messing with the odds. If the conditions are met, trades should be taken without hesitation. The odds will be in the forex traders only if all of the trades that meet the conditions are taken. A successful forex trader needs to pick a time frame and stick to that same time frame everyday and take all trades during that time frame.

Another important thing to note is that there is a random distribution between wins and losses for any given set of variables that define an edge**. **Whichever trading system that you choose is your edge, but you will never know in what order your wins and losses will come. As part of successful trading psychology, you need to be prepared for this and accept the losses, knowing that the odds will still be in your favor.

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