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 package, where the trader installs a Forex robot onto their trading platform, selects their criteria and the robot takes over. ..well that’s what you hope will happen.

There are many people who are selling Forex robots who have claimed to have found this Holy Grail, and though there are some fascinating Forex robots on the market, thorough testing by experienced traders has exposed many flaws in the claims made by the sellers.

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 substantiation of the historical charts you obtain, these will and do vary wildly. We have never yet been able to duplicate the results offered on a sales page. Some Forex robots we have evaluated were remarkably good at destroying 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 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 provide the Forex Robot failures, why? quite 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 analyses 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 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 work on Metatrader4, which is a very common trading platform and they require 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 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 make their results look good. Without a stop loss strategy, they allow uncontrolled draw-downs, keeping the trade running until it turns and comes back into profit. If the draw-down is big it can also send you broke since you may not have the reserves in your account to secure the loss, so your broker will demand extra funding.

If you don’t have the time to day trade and want 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.