Automated Forex trading systems are popular and most new traders think there the way to trade an automatic way to make money, make a regular income and all for the price of a night out! They don’t deliver, here’s why…

If I walked up to and said give me $100.00 and I Will give you an income for life, you would laugh at me but when people by get rich quick robots that’s exactly what they do.

Common sense should warn traders that if a system looks to good to be true it is and these systems offer better track records than the worlds top traders who are on millions a year in salary, yet none of these traders would ever use such a system, because they don’t work.

Here are some of the claims made and the reality.

- Double Your Income Every Month

This is impossible in an odds based market!

Forex markets don’t move to a set mathematical theory, so it’s impossible to double every month with certainty. Anyone who thinks they can is very naïve.

- Trade with Less than 1% Drawdown

Not even the best traders in the world achieve this and it’s a fact, to make big gains, you need to take risks and risk goes with reward. You cannot hive big gains without drawdown.

- Losses last a couple of days

Pure fantasy, any trading system even the best, will lose for long periods of at least a few weeks.

- Sophisticated Algorithms are used to Predict Prices

Well most I have seen, are anything but sophisticated and even more important, money management parameters are no existent or based on unsound logic.

Most of these systems are not designed by traders but by marketing companies. If you are a trader you know that markets are an odds based market and don’t move to a mathematical formula

- Track Records Presented

Most are simply back tests done in simulation and knowing the closing prices. There are some that put out real results but there is no independent verification.

A quick look in online forums shows an army of affiliates taking about how much money their making with the system and a link back to their site to buy it – well if their making so much, why are they so keen to sell it? You will then find another group of people who have lost heavily and don’t understand why.

Do any Robots Work?

Yes they do but there not the heavily hyped ones, you have to seek them out and many produce independent track records of between 30 – 100% annually with 20 – 50% drawdown.

These are good solid systems and if you trade them long term and can ride out your losses, you can make great solid gains.

Always remember if it looks to good to be true it is and if making money was so easy the whole world would quit working and start trading, hasn’t happened though has it?

Samuel Leslie Berkovits
http://www.articlesbase.com/currency-trading-articles/automated-forex-trading-systems-a-great-way-to-wipe-out-your-account-quickly-705353.html

Filed under: forex systems

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