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 provide the home based trader with a ‘set and forget’ trading methodology, where the trader installs a Forex robot onto their brokers charting system, selects their parameters and the robot takes over. ..well that’s what you hope will happen.

This is likened to finding the Holy Grail, and though there are some fascinating Forex robots available, independent testing by experienced traders has exposed many flaws in the claims made by the creators.

Most of the Forex robot performances 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 mirror the results presented on a sales page. Some Forex robots we have tested were remarkably good at cleaning out our demo account, so approach very carefully.

Demo accounts also have the reputation for 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 give you the Forex Robot failures, to put it simply, 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 these signals. It trades automatically, based on risk management parameters 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 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 begin trading. Some Scalp, which is taking small quick trades and others trade over extended periods and all will have loosing trades. You need to make sure they have stop loss strategies built in, some don’t, so double check!!

This is another way Forex robots enhance their supposed performance 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 crash your account since you may not have the money in your account to secure 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 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 at Automated Forex Reviews, you will also find other Forex Trading tools.