Automated Forex Trading | Forex Robot Scams
The deregulated Forex market has offered the chance for Moms and Dads to currency trade and this has produced a dramatic increase in automated Forex trading systems. These offer the trader the ability of a ‘set and forget’ trading methodology, where the trader installs a Forex robot onto their brokers charting system, selects their criteria and the robot takes over. ..well that’s what is supposed to happen.
This is likened to finding the Holy Grail, and though there are some very interesting Forex robots out there, extensive testing by experienced traders has highlighted inaccuracies in the claims made by the creators.
Most of the Forex robot credentials are based on historical ‘back testing’ results, not live account testing and depending on what broker software you are using and the substantiation 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 wiping out our demo account, so don’t believe all the claims.
Demo accounts are known for producing much better results that live accounts. Demo accounts will always fill a trade, whereas live accounts are subject to a variety of uncontrollable variables like spread variations, slippage, and liquidity, plus broker quirks and lot sizes, just to mention a few influences. So as you consider this carefully, 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, to put it simply, I don’t want to get sued!
How does an automated Forex trading system work?
Each is different and reads different signals, an automated Forex trading system dissects and interprets its preselected series of indicators, then determines entry and exit strategies based on its analysis. 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 need narrow trading spreads, often 2-3 pips, occasionally up to 5 pips. They often need time to “bed down” before they commence trading. Some Scalp, which is taking small quick trades and others trade over extended periods and all will have loosing trades. You just have to make sure the robot has stop loss strategies built in, some don’t, so be careful!!
This is another way Forex robots enhance their supposed performance look good. Without a stop loss strategy, they allow excessive draw-downs, keeping the position open until it reverses and comes into profit. If the draw-down is big it can also crash your account since you may not have the funds in your account to hedge the loss, so your broker will close your account.
If you don’t want to day trade and would like to use automated Forex trading, there are a couple of Forex robots we use, these two robots are regularly updated by their developers, so we constantly monitor their performance and keep them up to date, it’s all part of our trading management strategy for automated Forex robot systems.
To find out more about these Forex Robots, we review them on our new Blog, you will also find other Forex Trading Tools.
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