Automated Forex Trading | Forex Robot Scams
The Forex market is now open to retail traders and this has given rise to vast array of automated Forex trading systems. These offer the trader the ability of a ‘set and forget’ trading package, where the trader installs a Forex robot onto their trading platform, selects their chosen inputs and the robot takes over. ..well that’s what is supposed to happen.
Many are wishing for this Holy Grail, and though there are some very interesting Forex robots available, independent testing by experienced traders has exposed many flaws in the claims made by the sellers.
Most of the Forex robot sales claims are based on historical ‘back testing’ results, not live account testing and depending on what platform you are using and the fallibility of the historical charts you obtain, these will and do vary wildly. We have never yet been able to duplicate the results presented on a sales page. Some Forex robots we have tested were quite brilliant at destroying our demo account, so tread very cautiously.
Demo accounts have always been good at producing much better results that live accounts. Demo accounts will always fill a trade, whereas live accounts are subject to spread variations, slippage, and liquidity, plus broker quirks and lot sizes, just to mention a few influences. So when you stop and think about it, if a Forex robot cleans you out on a demo account, how do you think it will go live???
I would love to, but, I am not going to list the Forex Robot failures, why? quite simply, I don’t want to get sued!
How does an automated Forex trading system work?
Simply, an automated Forex trading system dissects and interprets its own series of indicators, then determines entry and exit strategies based on these signals. It trades automatically, based on risk management parameters and tries to make a profit. It will also close the trade, based on exit strategy.
Most of the modern Forex robots require Metatrader4, which is a very common trading platform and they should have narrow trading spreads, often 2-3 pips, occasionally up to 5 pips. It is not unusual for a robot to “bed down” before they commence trading. Some Scalp, which is grabbing small quick trades and others trade over longer periods and all will have loosing trades. You just have to make sure they have stop loss strategies built in, some don’t, so be careful!!
This is another way Forex robots make their results look good. Without a stop loss strategy, they allow uncontrolled draw-downs, keeping the position open until it reverses and comes into profit. If the draw-down is large it can also wipe you out since you may not have the funds in your account to protect the loss, so your broker will close the trade.
If you don’t have the time to day trade and wish to use automated Forex trading, there are two Forex robots we use, these two robots are always being updated by their developers, so we are always checking their performance and keep them up to date, it’s all part of our personal risk management strategy for automated Forex robot systems.
To find out more about these Forex Robots, we review them at Automated Forex Reviews, you will also find other Forex Trading tools.
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