Forex Robot Software – Why Traders Lose With Robots
Forex Robot software is popular but very few traders win with a robot, here we will look at the main reasons why and how to find a Forex trading system that wins…
Forex Robots fail in real time trading because the vast majority are based on unsound logic and have never made any money in real time trading sure, the track records says they have but look a little closer and you will see the reality which is:
The track record is a simulation in hindsight or presented by the vendor with no independent verification.
The claims are extraordinary and are obviously not true:
Double your money each month, little or no drawdown, trade with over 90% accuracy etc and you can get access to these systems (which beat the best traders in the world) for the cost of a night out.
If you listen to the sales copy, you have to make no effort and simply make money while you sleep. Common sense tells you these systems don’t work, they simply look to good to be true and they are.
Now I am not saying you cannot make money with automated Forex software because you can – but let’s look at the reality of trading robots and leave the fantasy behind.
The reality is there are some good solid programs you can use which have made real gains and the best normally make about 50 – 100% per annum with drawdown being around 20 – 50% depending on the risk profile of the system and a typical drawdown period will last for a few weeks.
So great long term gains, if you can ride out short term drawdown with discipline.
So if you buy a Forex trading system, look for real gains and check the logic so you can follow it with discipline.
You can buy a system and surprisingly, there are a few great free trading systems you can use that work (we like Richard Donchian’s 4 Week Rule) and they can if applied over the long term, lead you to currency trading success.
by Sonia Kristina
About the Author:
Forex Robots fail in real time trading because the vast majority are based on unsound logic and have never made any money in real time trading sure, the track records says they have but look a little closer and you will see the reality which is:
The track record is a simulation in hindsight or presented by the vendor with no independent verification.
The claims are extraordinary and are obviously not true:
Double your money each month, little or no drawdown, trade with over 90% accuracy etc and you can get access to these systems (which beat the best traders in the world) for the cost of a night out.
If you listen to the sales copy, you have to make no effort and simply make money while you sleep. Common sense tells you these systems don’t work, they simply look to good to be true and they are.
Now I am not saying you cannot make money with automated Forex software because you can – but let’s look at the reality of trading robots and leave the fantasy behind.
The reality is there are some good solid programs you can use which have made real gains and the best normally make about 50 – 100% per annum with drawdown being around 20 – 50% depending on the risk profile of the system and a typical drawdown period will last for a few weeks.
So great long term gains, if you can ride out short term drawdown with discipline.
So if you buy a Forex trading system, look for real gains and check the logic so you can follow it with discipline.
You can buy a system and surprisingly, there are a few great free trading systems you can use that work (we like Richard Donchian’s 4 Week Rule) and they can if applied over the long term, lead you to currency trading success.
by Sonia Kristina
About the Author:
NEW! 2 X FREE ESSENTIAL TRADER PDFS
ESSENTIAL FOREX TRADING COURSE
For free 2 x trading Pdf’s, with 50 of pages of essential info on Successful Forex Trading Strategies visit our website at: http://www.learncurrencytradingonline.com
December 28, 2009 No Comments
Forex Robots – Curve Fitting is the Reason 99% Sold Don’t Win
The vast majority of forex robots lose money and this is despite the fact they claim to have made big money. If you are wondering why they lose, its due to curve fitting. If you don’t know what it is read on.
First of all let’s reveal the truth about all those stunning track records you see with huge gains that look to good to be true well, they are. The reason they look so good is they have been designed looking backwards, testing over price action that’s happened!
That’s it – there actually made up on paper and never been traded. Track records normally carry this standard warning.
“CFTC RULE 4.41 – Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading….”
It then goes on for bit longer, explaining how these track records don’t indicate future profits – but that’s obvious, they are worthless – like most forex robots.
Now let’s look at why simulations never work in practice.
Some vendors don’t care if the system makes money or not – but others do and genuinely try to make it work and simulate a system but they make they end up bending the rules to fit the data and this of course wont work.
Data never repeats exactly the same again so the fact that you have bent the rules to fit one piece of data doesn’t mean it will work on another piece of data and of course, when your trading you can’t change the rules.
Any trader if they are looking at forex robots or building their own system needs to be mindful of curve fitting.
To avoid it look for the following in a track record to prove its not curve fitted. It should only have a few rules and they should be the same all the time, for all market conditions and work on all currencies in the same way.
The above will ensure a robust system but you wont find this in most of the robots you see for sale online.
Finally
Forex robots have a bad reputation – but there are some real track records out there, with good solid real gains and this means they have some results you can look at and see there potential. Don’t ever trust a forex trading system with a simulated track record, as its probably curve fitted, go for the evidence of real cash made.
by Kelly Price
About the Author:
First of all let’s reveal the truth about all those stunning track records you see with huge gains that look to good to be true well, they are. The reason they look so good is they have been designed looking backwards, testing over price action that’s happened!
That’s it – there actually made up on paper and never been traded. Track records normally carry this standard warning.
“CFTC RULE 4.41 – Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading….”
It then goes on for bit longer, explaining how these track records don’t indicate future profits – but that’s obvious, they are worthless – like most forex robots.
Now let’s look at why simulations never work in practice.
Some vendors don’t care if the system makes money or not – but others do and genuinely try to make it work and simulate a system but they make they end up bending the rules to fit the data and this of course wont work.
Data never repeats exactly the same again so the fact that you have bent the rules to fit one piece of data doesn’t mean it will work on another piece of data and of course, when your trading you can’t change the rules.
Any trader if they are looking at forex robots or building their own system needs to be mindful of curve fitting.
To avoid it look for the following in a track record to prove its not curve fitted. It should only have a few rules and they should be the same all the time, for all market conditions and work on all currencies in the same way.
The above will ensure a robust system but you wont find this in most of the robots you see for sale online.
Finally
Forex robots have a bad reputation – but there are some real track records out there, with good solid real gains and this means they have some results you can look at and see there potential. Don’t ever trust a forex trading system with a simulated track record, as its probably curve fitted, go for the evidence of real cash made.
by Kelly Price
About the Author:
NEW! 2 X FREE ESSENTIAL TRADER PDFS
CURRENCY RESEARCH and SYSTEMS
For free 2 x trading Pdf’s, and more on the best Forex Robots visit our website at: http://www.learncurrencytradingonline.com.
December 28, 2009 No Comments
The Reality of Making Money With Forex Robots (part 1)
When we talk about Automated Forex Systems, the temptation is to think that you pick up one of these little robots, plug it in, and suddenly cash comes rolling in.
Sounds nice, but what is the reality of creating a profit from these little bits of programmed software?
The makers of most of the Forex Robots out there are quick to boast of their track record of making profits. But if you look closely, most of these Robots have shown great success in their back-test results, but can show no evidence of their success in live trading.
The companies backing these systems expect the unsuspecting buyer to believe this evidence proves that their robots will make them real money. In reality back-tests in themselves are worthless.
I need to make myself clear here. Back-tests are worthless unless you can validate them with live trading.
One Forex Robot has been backtested for 9 years, which means it was rigorously put through over 9000 trades. Not only that, in live trading it has been consistenely winning 85 to 100% of its trades!
You might ask, “What does that mean?” Here’s my point: If you back test a Robot and it shows 100% “demo” proof month after month, it should produce around 80-100% profit in live trading.
So when you’re shopping for a Forex robot, make sure you buy one that has a real and proven track record over time in live trading. What you are looking for is a system that will build you profits for the long run.
In my next article we’ll continue to discuss the reality of making money with a Forex Robot.
by Eric Jacobson
About the Author:
Sounds nice, but what is the reality of creating a profit from these little bits of programmed software?
The makers of most of the Forex Robots out there are quick to boast of their track record of making profits. But if you look closely, most of these Robots have shown great success in their back-test results, but can show no evidence of their success in live trading.
The companies backing these systems expect the unsuspecting buyer to believe this evidence proves that their robots will make them real money. In reality back-tests in themselves are worthless.
I need to make myself clear here. Back-tests are worthless unless you can validate them with live trading.
One Forex Robot has been backtested for 9 years, which means it was rigorously put through over 9000 trades. Not only that, in live trading it has been consistenely winning 85 to 100% of its trades!
You might ask, “What does that mean?” Here’s my point: If you back test a Robot and it shows 100% “demo” proof month after month, it should produce around 80-100% profit in live trading.
So when you’re shopping for a Forex robot, make sure you buy one that has a real and proven track record over time in live trading. What you are looking for is a system that will build you profits for the long run.
In my next article we’ll continue to discuss the reality of making money with a Forex Robot.
by Eric Jacobson
About the Author:
Eric Jacobson lives and works in the foothills of the beautiful Ozark
Mountains. He has been involved in some aspect of Internet marketing
since 1999, and has been involved in trading the Forex Market for the past
3 years. He is always looking for affordable and profitable software and programs
he tell his readers about.
Forex trading isn’t just for the “Big Boys” any longer. See how a
“smart” Forex Robot can quickly put you in profit.
http://www.squidoo.com/Automatic-Forex-Investing
December 28, 2009 No Comments
