Institutions have used trading systems for decades. In fact, your stockbroker relies on recommendations based on a trading system. If institutions and Wall Street executives are using trading systems, then why aren't you? For many years, sophisticated software was Wall Street's advantage over common investors. Currently, however, common investors have access to the same tools that have made billions of dollars for institutions.
Trading systems are easy to evaluate. How much risk are they taking, and what are the results? You will want to use a program that minimizes risk and maximizes returns.You should subject all prospective trading systems to a probationary period. Allow the system a three month testing period before you put in real money. Three months is an adequate amount of time to separate the good trading systems from the bad trading systems. Most firms will allow you a trial period; unfortunately, it usually won't last for three months. Try to narrow many programs down during the trial period, and carry over the best programs to your three month litmus test.Cost is far too often a deterrent for many investors. If a program can make you thousands of dollars more than a competitor's program, you should be willing to pay hundreds of dollars more for the software. During your trial period, trade with a practice portfolio. At the end of three months, compare the returns and accuracy rates for various programs. If you're following all of the signals and not hitting an accuracy rate for trades above 50 percent, the program probably isn't worth your time.
