Automated Forex Robots – Why They Don’t Live Up to the Hype and Lose Money

Automated Forex Robots promise a regular income for $100 or so but of course they don’t deliver the gains they claim in real life for users and the reason is obvious and enclosed…

The Forex robots you see advertised online with great track records all have a problem – the track records are simulated back tests or to put it another way made up.

The fact the vendor can choose where to buy and sell, knowing all the closing prices, makes it easy to make gains and of course, the gains you see are obviously not going to repeat and the reason is obvious – if they did, the vendor would keep quite and make a fortune, or sell the system to a major investment house for millions of dollars.

The people who promote these automated Forex robots, have the good sense not to trade them, as they know that a naïve or greedy trader will give them a guaranteed profit by buying the software so:

Do any of automated trading systems make money?

Yes they do and you can search some out, that have real performance and you can even get free ones that make money (we are big fans of The 4 Week Rule which has made savvy traders countless millions over the last 25 years ) but you have to keep the following points in mind when trading even the best robots.

- The best robots can make 50- 100% annual compound gains and are long term

- Drawdown periods normally last for a few weeks to a few months

- The size of drawdown varies by is typically 25 – 50% in size

They are long term and you must understand how and why they work, so you can follow them through long losing periods with discipline.

The big gains and no drawdown only exists in simulations, in the real world, even the best systems drawdown for long periods and you need to have the right Forex education on how and why it works, so you have confidence and discipline to follow the signals exactly.

The automated Forex Robot industry has a bad name and that’s due to the myth that simulated profits, you see on the made up track records, will repeat in real life and of course they don’t.

The good news is there are some automated Forex trading systems with real track records which can and do produce big long term gains.

Pick the right one, appreciate you have to judge long term and ride out short term periods of losses and you will enjoy currency trading success.

Forex Trading Robots – Why Do We not Give Up our Jobs and Use Them?

I checked a forex trading robots track record the other day and if I ran my trading account size on its track record I would be making $324,000 a year! Not bad for an outlay of a few hundred bucks. People fall for these track records, yet they always lose why?

Because their greedy, think forex trading requires no effort or they simply don’t read the disclaimer which is tucked away in the small print.

If you see a track record of a forex automated trading system on the net with this disclaimer then it probably spells a wipe out of equity here it is:

“CFTC RULE 4.41 – Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown”.

So they are not real time profits there paper profits made looking backwards! Would you trust the above?

I know I wouldn’t!

It amazes me how many people buy these unproven systems.

Most of the track records are so good, you wonder why the vendor even bothers selling it – he could make enough money by trading it. Of course he doesn’t, because he knows it won’t win and that’s why you never see a real time track record.

Do savvy forex traders use them, do you see them in bank dealing rooms or do you ever see anyone who has made long term money with them – No you don’t.

Today there is a huge industry in these trading systems and they appeal to the naive and greedy traders, who won’t to make money with no effort.

Of course in life you get out what you put in and forex trading is no different.

Forex trading can offer you the ability to make huge profits and even a life changing income – but you must have the right mindset and get the right forex education.

A forex trading robot probably will destroy your equity – but you don’t have to take the lazy path!

Forex is a challenge, an exciting one, with huge rewards so accept the challenge, get the right forex education and you can enjoy currency trading success.

Forex Trading Robots Vs Manual Trading Which is Best?

Should you buy a forex robot and trust it to lead you to currency trading success or should you learn forex trading yourself and trade manually? Which is more likely to lead you to currency trading success?

Consider this question:

If forex robots make as much as they claim why don’t banks and brokerages sack their fund managers and dealers and use robots?

Think about it – most of the forex trading robots you see claim to make as much, if not more than the best bank dealers, yet only cost a few hundred bucks.

So why don’t the banks and brokerages sack their dealing teams that cost them far more? You could ask yourself as well – why bother working, when you can just sit at home, put your feet up and your robot goes to work for you?

The answer is of course the forex trading robots you see online won’t make you money long term. Why? Well consider this, all the track records you see are made up in hindsight and simulated, there NOT real trading. Here is the typical disclaimer you will see:

“CFTC RULE 4.41 – Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown”.

Think a track record with the above printed on it will make you money? Well try it and see!

These automated trading systems are designed to appeal to the greedy or naive investor and they really should know better – making money in any venture is not easy.

There is one advantage you have over any robot – you are capable of independent thought, no computer can think for itself and your brain is an amazing tool – if you use it correctly.

The rewards with manual trading are huge and you need to work smart and get a set of trading rules, to execute your trading system and have the discipline to follow it.

Forex trading offers huge rewards for the effort you need to put in and anyone can learn to trade – it’s just a question of having the right mindset and right forex education.

Today, we marvel at computers and how they have enriched our lives – but in forex trading the appliance of science is not enough, as markets don’t move to set formula’s, there an odds game. However, if you learn how to trade the odds you can win.

So which is best using a forex robot or manual trading?

You know our view its manual trading although we have seen some robots that can make money (they are either expensive or require tremendous discipline) you can make more if you apply yourself correctly.

Forex trading is a challenge and one you win just keep in mind you can win have confidence in your ability and learn currency trading for long term gains and don’t trust anyone else – especially not a forex trading system with a simulated track record!