Today’s Forex market is all a buzz about Forex robots. In recent times the creation and use of Forex robots have grown tremendously. A Forex robot is a software designed to not only make trading decisions for you but to place trades for you automatically as well. Many see the use of Forex robots as the ultimate in hands-free Forex trading freedom.
The increasing popularity of Forex robots has brought about a flood of commercially available products to the marketplace. Here are some tips which will help you navigate through the ever-growing sea of commercially available Forex robots.
For the most part, ignore the testimonials
You already know that it makes good sense to look for third-party opinions when making a purchase. Unfortunately, in the case of Forex robots, you have to be especially careful. Many of the testimonials you see will be from people who have only used the product for a short period. You are more interested in how an automated Forex robot will work for the long term.
Customer testimonials may also have nothing to do with the performance of the product. Some testimonials may refer to the robot Creator’s excellent customer service. While customer service, is of course, very important it doesn’t necessarily have anything to do with the performance of the trading software.
If it sounds too good to be true
The old saying “if it sounds too good to be true, it probably is” definitely applies in the Forex industry. It appears that many products seem to be specifically designed to appeal to those looking for a quick fix or get-rich-quick scheme. It is wise to avoid any Forex robot that appears to be a get-rich-quick scheme.
Length of track record
As you look around at commercially available Forex robots, you will notice that many of them seek to offer proof in the form of trading track records. Unfortunately, a track record of a few months is not going to tell you much about the true nature of the product. The truth of the matter is that there are “bad” Forex trading systems that can have a few months of stellar performance.
Short-term trading systems will need at least a year of performance data and longer-term trading systems will need to show it least five years of performance data. Basing your purchase on any track record shorter than those mentioned above would be a crapshoot.
Working capital involved
A good Forex robot will tell you how much working capital is needed to trade effectively. Don’t play the guessing game of “how much money do I need” when buying a Forex robot.
Percentage of winning trades
As you look around the Forex product landscape you will no doubt notice that there are many available which claim to have a very high percentage of winning trades. When talking about high percentages, we will see many in the 90 to 95% area. There is no doubt that these high percentages appeal to a significant number of people.
What you might not know is that to obtain these high percentages, the Forex product creator has, in many cases, used risk-reward ratios at dangerous levels. One of the most popular Forex trading products on the market uses a rate of 30 pips potential loss for every one pip gain. It doesn’t take a rocket scientist to see that it only takes one loss to wipe out numerous consecutive wins.
You now have some essential criteria at your disposal to help you more thoroughly evaluate commercially available Forex robots. The evaluation process is critical. It is effortless to be impatient and wants to jump right in and start trading. Work to resist this initial temptation and take your time for proper evaluation before your purchase. Don’t hesitate to refer back to this list of guidelines to help you find the best Forex robots for you.