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 Robot Trading Myths – 3 Myths Traders Believe And Lose

Forex robot trading is not the easy route to huge profits that most traders believe. If you want to win with an automated trading system make sure you don’t believe the 3 common myths enclosed…

Here are your 3 common myths

1. Forex Robots Offer Huge Gains and Low Risk

Does anyone seriously believe you can double your money each month with little or no risk and make money while you sleep? This is the advertising copy and it’s laughable. No robot does this and the user gets handed a lesson by the market.

2. Complex Mathematical Algorithms that Predict Price Changes in Advance

I see many robots which claim 90% accuracy and they say the complex mathematical equations they use can predict price changes in advance but they don’t. Most of the equations are actually crude, not complex and lose. These systems also tend to trade too much and have no concept of money management.

Mathematics to predict the market is a huge myth why?

Because markets don’t move to mathematics, they move to probabilities. In an odds based market a complex equation is of no real use, as simple systems always work best as they are more robust than complex ones.

3. You Have no Risk Because you Can trade it in a Demo Account

This is normally part of the advertising copy. Trade it for a month and see how it performs in a demo account and see for yourself.

Well since when was a month long enough to judge a system and its performance? Two years should be the minimum any system trader should consider and by the time you have done that, the guarantee no longer applies.

The Reality of Forex Robot Trading

Never matches the hype and deep down most traders know they wont get rich for a few hundred dollars but they still buy them. In recent years we have had the rise of online trading and account minimums have fallen to just a few hundred dollars.

People want to get in on the action and the Forex robot myths sell a lot of systems but if you believe them you will lose.

Before you trust your financial destiny to mass produced piece of software, think about the above and try a different route; Get yourself a decent Forex education and learn skills, apply them with discipline and you will be on the right route to Forex trading success.

 

Forex Robots – Essential Facts ALL Buyers Need to Know

Forex robots are the choice of most novice traders and here, we will look at some facts that you need to know before buying one…

Forex robots are a great way to lose money, so let’s look at the claims the vendors make and the facts about robot trading which means you should avoid them.

“You can Double your money Each month”

If you could double your money each year, you would be up there with the best traders in the world, no robot makes gains like the above except in paper back tests.

“You Can trade with 90% accuracy”

The robots claim you can predict the future with their algorithms but of course no one knows the future and prices cannot be predicted. Markets don’t move to mathematical certainties, they move to probabilities so you can forget trying to predict them.

You can trade with less than 1% drawdown

If you are trading Forex and aiming for triple digit gains, this is impossible. It’s an investment fact with reward goes risk and double figure drawdown is inevitable.

“You Don’t need to know what you’re doing to trade with a Robot”

Now this statement is true! You don’t you follow the signals but what’s the point of following something that loses? Go to the casino if you don’t mind losing, at least you will have more fun.

“The Cost is just a few hundred dollars”

You get the hype about how cheap they are and they are so cheap because they don’t make any money. If they really did make the gains they claim, they would be worth hundreds of millions of dollars.

So it’s no surprise to learn that the easy money the vendors of these systems claim you can make is not the reality for the users of these systems. All the heavily hyped robots make no money and never will.

If you want to make money at Forex trading, get a decent education and learn skills and you will be well rewarded for your efforts and enjoy currency trading success.