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Top 10 Weirdest Trading Systems

October 29, 2017 14:00

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Dear traders,

Ever dream of developing the best trading system, accidently stumbling upon one of the most unusual systems in the world?

You are about to find out if your idea is in our list of top 10 strangest trading systems. Feel free to add your own ideas in the comment section below and obviously do not use the systems in questions yourself, not without proper testing.

Curious to see what systems made it to our list? Let's start!

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Number 10: Trading According to the Weather

Having a good mood because of the sunny weather? Chances are the market could feel the same way.

Various studies show that stock markets do perform better on sunny days as compared to cloudy or rainy days. Apparently, the sunny days impact the traders and the markets positively in the long run.

Number 9: MA System with 20 MAs

Moving averages (MA) are an excellent indicator for determining trend, momentum, breakouts, and support & resistance, but some traders get carried away with their admiration for the MA.

They add exponential, simple, smoothed, and linear weighted MA's to their charts with all different types of periods from 1 to 1,000. Problem is that the price and the candlesticks or bars eventually disappear from your sight.

As a fan and user of price action and candlesticks, I would never want to miss out on the key info from candles. For me, using 2 to 5 MAs is still fine, but anything above 15-20 is excessive. In the image below, you will see 13 MAs: it's crowded, but doable for some traders.

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Image USD/JPY 4-Hour Chart from 13 September to 26 October 2017

Number 8: Pitchfork Trading

Do not misunderstand me, there is nothing wrong with analysing charts with pitchforks, in my opinion. For me, there are a couple of things that make it a bit odd.

First of all, it has a funny name. It's something that we would expect to use in a farm, not on charts. Secondly, it's difficult to draw on the charts isn't it?

Number 7: Solely Following the Advice of Others

Although I am proud to provide my best wave analysis and chart analysis of the financial markets on a daily basis, it's still important to verify any chart, trading idea, or analysis with our own vision.

The focus should always be on learning how to trade in a better and more consistent way, rather than collecting the benefit of one potential profitable trade setup. The main idea is simple: focus on the methods rather than the signal.

Number 6: Dozens of Indicators

Indicators are very valuable tools of information, but they become worthless if they clutter the chart too much and overcomplicate your analysis and trading.

Indicators provide useful information for trend, momentum, and support & resistance (S&R) if done properly. For instance, using a couple of tools for S&R is fine, but adding 50 indicators would make the chart unusable and unreadable.

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Image USD/JPY 4-Hour Chart from 13 September to 26 October 2017

Number 5: The "Holy Grail"

All traders dream of the "Holy Grail", a perfect trading system that never, or rather hardly, makes a mistake. Unfortunately, finding this flawless system can be compared to finding an oasis in the desert. My tip is simple: focus on learning to interpret the charts rather than finding an oversimplified system.

Number 4: MA Crossover Systems

All of us know it: moving average crossover systems are not good for entries. Yet some still dream of finding a combination that could work for them. My advice: skip the crossovers for entries and use MAs for analysis purposes.

Number 3: Trading Based on Gut-Feeling (No System)

Some traders just think that their gut feeling or intuition will lead them to winning trades. This might be true for a market veteran with 20+ years of trading experience under his belt, but this will probably not work out well in the long run for traders with less experience.

Taking the time to understand how to analyse and interpret the charts is a skill well worth developing and learning. Luckily, Admiral Markets is right here for you with one of the best analytics and education sections on the net.

Number 2: Methods Based on Astrology

There are traders who use concepts from space, like moons and planets. The idea is that these objects impact our activities on earth, and also the markets. I myself have never tried analysing or trading the markets in such a way. In the image below, you will see how I added the moon phases (vertical lines connected to yellow balls) and the planets (vertical lines connected coloured balls).

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Image: EUR/NZD from November 2016 to October 2017

Number 1: "Everyone Is Looking to Buy"

The market is probably reaching an oversold point if literally everyone is talking about buying an asset because "it just keeps moving higher". The dot-com bubble back in 2000 was one of those cases where everyone was joining the quick climb of tech companies.

The message is simple: be extra careful if too many non-market people around you become interested in the markets. Chance is high that a bubble is on its way. The same could be said for the real estate market before the Great Recession of 2008 in the U.S. as well.

We're now done with the top 10 most unusual trading system I could think of. If you have anything to add, welcome to the comments section below!


Cheers and safe trading,

Chris Svorcik

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