Automated Forex Trading | Forex Robot Scams
The Forex market is now open to retail traders and this has produced a dramatic increase in automated Forex trading systems. These provide the home based trader with a ‘set and forget’ trading package, where the trader installs a Forex robot onto their trading platform, selects their parameters and the robot takes over. ..well that’s the theory.
This is likened to finding the Holy Grail, and though there are some fascinating Forex robots on the market, extensive testing by experienced traders has shown up many failures in the claims made by the sellers.
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 accuracy of the historical charts you download, these will and do vary wildly. We have never yet been able to replicate the results offered on a sales page. Some Forex robots we have evaluated were incredibly efficient at cleaning out our demo account, so approach very carefully.
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 a variety of uncontrollable variables like 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 give you the Forex Robot failures, no, I don’t want to get sued!
How does an automated Forex trading system work?
Simply, an automated Forex trading system analyses and interprets its preselected series of indicators, then determines entry and exit strategies based on its interpretation. It trades automatically, based on risk management strategies and attempts to make a profit. It will also close the trade, in line with its pre-coded parameters.
Most of the modern Forex robots run on 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 start trading. Some Scalp, which is taking small quick trades and others trade over longer periods and all will have loosing trades. You must make sure the robot has stop loss strategies built in, some don’t, so double check!!
This is another way Forex robots make their results look good. Without a stop loss strategy, they allow vast draw-downs, keeping the position open until it returns to into profit. If the draw-down is large it can also wipe you out since you may not have the reserves in your account to protect the loss, so your broker will close your account.
If you don’t have the time to day trade and would like to use automated Forex trading, there are a couple of Forex robots we use, these two robots are always being 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 at Automated Forex Reviews, 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
