subject: Forex Trading Robots - Common Myths Surrounding Auto Trading [print this page] The Forex market is one of the most unpredictable and frequently changing markets you can trade on. Although trading this kind of market is often high risk, the possible rewards mean there are still plenty of people who are prepared to venture into it.
Forex trading robots are just one of the tools many Forex traders use to try and boost their earnings, and whilst there is a lot of divided opinion when it comes to whether using them is a good idea for the newbie Forex trader, many do see them as a valuable resource to gaining a foothold in the industry. Here we will look at such trading robots, and attempt to separate the truth from the myths surrounding them:
Clever and complicated Forex robots offer the best service
Unfortunately, this is not true. Somerimes the more simple systems are the ones that work best. The good thing about simple systems is that they use just simple algorithms and require fewer elements.
Aside from that, vendors will often claim that their programs were designed by brilliant people. Some even claim that their programs are created by people trained by NASA, but what would such people know about trading anyway?
Trading can be improved by scientific and predictive systems
Yes, Forex trading and automated trading systems use mathematical calculations to understand and analyze trading signals and their trends. But, are the mathematical calculations some programs perform really effective?
These formulas may help you analyze the market, but they could never guarantee to accurately PREDICT the outcome of a trade. If this were possible, then these vendors could have become rich by simply trading Forex themselves.
Forex robots can eliminate loss
There are Forex robots and automated system claiming to have zero losses. Again, if this was true then there would a ton more walking millionaires in the world. The fact is that around 95% of Forex traders lose their money. So, the remaining 5% are the only successful ones, and out of that small percentage, how many are using Forex robots? That said, it is perfectly normal for all traders to encounter some losing periods.
You can leave your Forex robots to operate on their own
Some Forex robot vendors claim that you can just set up their robot on your account and let it operate on its own. It can enter and complete trades for you, without you even participating in the process.
Any successful trading system has to be executed in a way where it can be monitored and follow the trader's overall trading strategy. For a robot to do this depends on how you make your robot work for what you want and your strategy, not the other way around.
Success in demo accounts is the same for live accounts
Just because you have proven the effectiveness of a robot in a demo account, it doesn't guarantee it will show the same results on a real account. It is important to do proper research and check customer reactions and comments about the product in question. Most Forex trading forums will offer discussions about what are the common problems encountered in trading real accounts with particular robots.
by: Gen Wright
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