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 give the trader a ‘set and forget’ trading methodology, where the trader installs a Forex robot onto their trading platform, selects their parameters and the robot takes over. ..well that’s what is supposed to happen.

There are many people who are selling Forex robots who have claimed to have found this Holy Grail, and though there are some very interesting Forex robots on the market, thorough testing by experienced traders has shown up many failures in the claims made by the vendors.

Most of the Forex robot performances are based on historical ‘back testing’ results, not live account testing and depending on what system you are using and the fallibility of the historical charts you download, these will and do vary wildly. We have never yet been able to replicate the results claimed on a sales page. Some Forex robots we have tested were remarkably good at cleaning 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 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 cleans you out on a demo account, how do you think it will go live???

Much as I would love to, 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?

Each is different and reads different signals, an automated Forex trading system reads and interprets its own series of indicators, then determines entry and exit strategies based on these signals. It opens a trade automatically, based on risk management strategies 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 should have 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 grabbing small quick trades and others trade over longer 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 double check!!

This is another way Forex robots enhance their supposed performance look good. Without a stop loss strategy, they allow excessive draw-downs, keeping the trade running until it reverses and comes into profit. If the draw-down is huge it can also send you broke since you may not have the funds 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 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 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.