Here we are going to look at a simple FX Trading system which makes big gains and is free. There are a lot of systems sold which simply don't make money but this FX trading system does and it won't cost you a cent. We will also look at the basics of any successful trading system and the principles there based on.

The system which makes money which is free is Richard Donchians 4 Week rule and here, we will give you a brief introduction to it and you can actually get it by signing up for our free reports – simply click the header on the right of this page and fill in the form.

The 4 Week Rule

Richard Donchians 4 Week Rule trading system has only got one rule to follow so here it is:

Buy a currency on a break to a 4 Week high and hold the trade. Wait for a 4 Week low to be made and reverse the long to a short. Keep reversing the position, as 4 week lows and highs are made and always maintain a position open in the market. That's the rule and the system. Its simple and has been used by savvy traders since the late seventies to make money and it will always, get you in on all the biggest trends and profits.

Simplicity is the Key

Many traders think that if they us e complex systems they can beat the market and make big gains with no draw down but this is simply not possible. Forex markets don't move to science or hidden order they move to the odds and this means simple systems work far better than ones which are to complicated and have to many elements to break.

In Forex markets, you are going to have losses and most successful trading systems are designed to make money long term on less than 50% of trades being profitable.

The Elements All Successful trading Systems Contain.

Of course most are simple like the one above and they also have the following in elements in common:

They tend to be long term and catch trends which last for weeks or months, rather than trading short term. Day trading and scalping systems don't work. They trade the noise of the market and profits never cover losses and this leads to a wipe out.

Most of the systems trade breakouts to new market highs or lows ( like the 4 Week rule) or work on swing trade, overbought and oversold scenarios in the market.

The systems all have sound money management and allow reasonable stop levels at least 50 – 100 pips. These systems will lose at some point for several months on an end but will win longer term, due to the size of the winners. Its totally a lie, that you can trade for big profits with little or no draw down and any system that claims 90% gains with less than 1% draw down - is not telling the truth.

All systems that make money are based on trading the odds – there is no perfect set up and the system will generally win 30 – 50% of the time.

How Much Money Can you Make with a Simple FX Trading System?

If you judge a system over a 3 year holding period, you will tend to find the best can achieve around 50 – 100% and typically draw down will be around 30% at some point from a peak in equity and will last 3 – 6 months.

Final Words

If you want to make money with an automatic FX trading system you can but keep in mind you need to focus on the long term and ride out short term equity dips. System trading suits the disciplined patient trader and if you are one of those the best simple FX trading systems can make you a great second income and the 4 Week rule is a free one which you should look at.