'Over The Counter Systems': Shall We Follow Them?

NSE:NIFTY   Nifty 50 Index
While Surfing on the internet we find many websites where people claim to have a magical system which do not fails in any type of markets. Not only that, their claims at several instances have been statistically supported by them.

Any new gullible traders would simply like to have such a system. In order to make millions, he invests his hard earned money in to that.
Sooner than later he loses a lot of money following the system and realizes that the system actually does not work and he has been duped by the seller.

What happened to that trader would have happened to hundreds of others. It all starts from free calls, provided by the sellers, in your message box or email. During this free trial everything will actually work. But when you subscribe to the services, all of a sudden those calls stop working and you just lose much more than you expected.

The reality is that, people providing such services do follow a system themselves. The only problem is that there is no system in this world which works in all type of markets. There are most which work in trending markets, while a very few work during sideways or consolidation phase.
So even if someone makes money in the trending phase, he would lose more in the consolidation phase following the same system.

At present I have two solutions for the above problem.

1. Do not buy any system, no matter how fancy the claims are. Work yourself by learning about the market and utilize your learning by practicing in the market with real money. But ensure that you trade with little money in the beginning and not increase the trade size before you are consistent winner for one month. Learn to adjust your strategy according to market conditions, but not too often. I would suggest every 3 months time period to revise a strategy that has been religiously followed by the trader. Work more upon money management and market psychology than on strategy itself.

2. Search and use ready made systems. Better find 2-3 which work in different phases of the market. But it would be upon you to find out which one works better in one type of market than the other. It would also need time and patience to develop skills to evaluate the calls by yourself. As you gain experience you won't blindly follow the calls but would first ensure that they are up to your own parameters which would get developed over time. Proper Money management would be the key into this process.

I hope this brief discussion makes sense to most of the readers. Leaving rest of the discussion on the table.
Do like, do comment.

Trade safe, stay healthy.

Comment: Attaching some of my post for the new followers.


Dear Bravo Trader, Nice Article.

Any system provider should always explain the concept or the factors that are taken in to consideration while creating the system + the back testing results over atleast 1 year period using different timeframes.

With this information, traders can understand what they are working with and how effective the system or tool.

For example, Nifty or Banknifty are indices and in reality they are scales which measures the performance of Indian economy and Banking system Performance. But most of the traders apply traditional price action based asset methods.

In USA for NYSE they provide tick indices which are breadth tools to trade the indices. But our NSE are not providing them. now in this scenario can you call our exchanges DUPING TRADERS with out providng the much needed info.

People who are good at programming develops systems or tools according to the domain KNOWLEDGE they gain.

At the end if the day its the domain knowledge that fuels any logic behind the programmed system.

So in your article you should have clearly distinguished between people giving calls vs domain specific systems or tools.

In the article, you mentioned consolidation phase - can you explain it practically.
Bravetotrade Tradepro_MoneyFlow
@Tradepro_MoneyFlow, Thanks for the detailed comment.

Yes, system providers should explain the concept but they don't coz they wana keep it to themselves.

As far as economics is concerned, it is GNP, Per capita income, literacy rate, life expectancy at birth etc. (not nifty or bank nifty index) which reflect the economic development.

I think it is the lack of technological development that NSE has not been providing tick data. It does not mean they r duping us.

I should v more clearly distinguished bw calls and domain knowledge. I only targetted fake people and did favoured systems also in my solutions.

Perhaps I ll explain consolidation in my future posts.
well explained bro ........cheers !!!
Bravetotrade stocksinboxx
@stocksinboxx, Thanks.
Good collection of posts. Thanks for sharing.
@vanathi, Always welcome.
*While i believe Market to be the king of all* , I consider the marketing gimmicks to dupe the illiterate by the highly professional marketing people with their sophisticated fake system really works.

They make huge amount of money by duping people.
Bravetotrade MAYA_MUMBAI
@MAYA_MUMBAI, True. That's why I thought this topic is worth writing.
True!!! Lack of exposure in market when they spend their valuable time the right way then they realize whats virtue Thank for sharing like this educational post :-)
Bravetotrade PrabhuRajarathinam
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