ForexGen studies past price and volume changes in order to build up simulations on future price movements. ForexGen's analysts mainly make use of charts and financial formulas to gather enough information used in technical price speculations.
There are several limitations of technical analysis that you have to consider when using the methods of technical analysis.
One of the most important limitations for most technical analysis methods is the fact that there are so many people using the basic technical analysis methods already, and the number is increasing every day, making it harder for a single trader to make money on the market with the methods.
Because of these methods are so widely spread and there is so much money riding on the methods, some also claim that technical analysis has become self-fulfilling prophecy, as people tend to enter the market and put their stops on the same places, increasing the volatility towards the technical analysis method being correct.
Another side to technical analysis is that the methods typically give a lot of false signals. The risk of ruin by betting on all the signals the same way is very real. This is why most traders have developed a comprehensive money management system to accompany the trading system, to take into account the fact that the trader needs to conserve capital to the situations where the system makes its money.
In terms of money management, you have to consider that many technical analysis systems provide only information on entry and exit signals. If you're using a trend trading system, your main focus may be on end-of-day values of the financial product. In that case it is very important to use stops, so that extreme intraday volatility and outlier days in performance do not wipe out your capital.
Most technical analysis methods also leave the idea of pyramiding out of the picture. Pyramiding refers to the fact that if your system has identified a trend, it may be beneficial to invest further into the trend as the trend continues.
Pyramiding techniques should also be accompanied by a strong money management systems and typically with trailing stops, to limit the increased risk from increasing the risk placed on any one trend.
ForexGen Money Manager’s services provide an extremely competitive program for managing client’s funds in order to introduce new clients to the Forex Market without having them to trade. The Money Manager will be gaining commissions from two fixed sources and a variable one based on the amount of deposits you are managing in your money manager account.
Finally, technical analysis systems usually do not take into account correlation between different markets. If you are analyzing several markets and they all give similar signals, they may have close correlations, meaning that the risk profile for each is very similar, and that the prices of the assets move in close steps with each other.
ForexGen provides a unique online trading experience based on our intelligent online Forex trading package, the ForexGen Trading Station, including the best online trading system.
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