Automated Forex Trading | Forex Robot Scams
The Forex market is now open to retail traders and this has generated a huge rise in 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 Metatrader platform, selects their criteria and the robot takes over. ..well that’s the theory.
This is likened to finding the Holy Grail, and though there are some very interesting Forex robots on the market, extensive testing by experienced traders has highlighted inaccuracies in the claims made by the vendors.
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 download, these will and do vary wildly. We have never yet been able to duplicate the results claimed on a sales page. Some Forex robots we have evaluated were incredibly efficient at wiping out our demo account, so don’t believe all the claims.
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 taking this into consideration, if a Forex robot wipes you out on a demo account, how do you think it will go live???
I would love to, but, I am not going to provide 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 reads and interprets its preselected series of indicators, then determines entry and exit strategies based on its interpretation. It trades automatically, based on risk management factors and tries to make a profit. It will also close the trade, based on exit strategy.
Most of the modern Forex robots run on Metatrader4, which is a very common trading platform and they require 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 extended periods and all will have loosing trades. You need to make sure the robot has stop loss strategies built in, some don’t, so double check!!
This is another way Forex robots make their paper profits look good. Without a stop loss strategy, they allow uncontrolled draw-downs, keeping the trade open until it turns and comes back into profit. If the draw-down is huge it can also wipe you out since you may not have the reserves in your account to secure the loss, so your broker will close the trade.
If you don’t want to day trade and wish to use automated Forex trading, there are a pair of Forex robots we use, these two robots are constantly updated by their developers, so we constantly monitor 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 on our new Blog, you will also find other Forex Trading Tools.
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Tags: Automated Forex Trading, Automated Forex trading systems, fapturbo, forex megadroid, forex robot, Forex Robot Scams
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