I was talking to a trader that was following a trading system that only teaches to buy a couple of currencies and hold. When one currency goes up the other is supposed to come down keeping them in correlation. This way you would have a hedge on your trades and you would not lose money because the swap (interest paid by the banks) would build up in your account. In the long run you should make money. That theory has caused the loss of a lot of money for traders.
We suggest that it is best to learn how to trade so you can trade in the direction of the trend. With this other strategy you are trading against the trend on at least one side of the hedge. If the stronger side of the hedge goes against the trend you are bound to lose.
A trader’s key to longevity is to gain knowledge about trading by following sound trading rules that work in all types of markets environments. Once again Knowledge is the key to success in trading. It still amazes us that traders will gain more knowledge about things that are supposed to trade for them than they will about learning how to trade in the first place. We have not seen any system that will make a trader money on a consistent basis other that a good hands on trading approach.