Do Automatic Forex Trading Systems Really Work?

Do Automatic Forex Trading Systems Really Work?

by

DivisaFX

There\’s a lot of controversy surrounding automatic Forex trading systems at the moment, with many traders dismissing them as a flat out scam, while others have tried them and been badly burnt as a result. The big question that remains in the Forex community is still whether there are any systems out there that actually work?

Logically, you would think that if there are people trading a manual strategy successfully, then there should be successful automatic Forex

trading systems as well. After all, it\’s just a matter of quantifying the rules and decision making processes behind any successful strategy to come up with a winning system, right? Obviously, the reason why so many people are losing money is that either something is lost in translation, or the end user isn\’t using the system as it was intended to be used.

Don\’t get me wrong, I\’m not saying that there aren\’t developers out there who are just in business to scam unsuspecting new traders. There are, which is why you should do your due diligence on credible resources like Forex Peace Army before you make a decision to buy any system. At the same time, you shouldn\’t blame all bad performance on the developer either, because you may not be using it in the right way. So how do you know if your automatic Forex trading systems are truly broken, or if it is actually you who isn\’t using it correctly?Avoiding The Common Mistakes People Make With Automatic Forex Trading Systems

First I want to point out some of the most common mistakes people make with automatic Forex

trading systems that cause them to fail consistently with any and all systems that they use. The biggest mistake of all is definitely believing in the hyped up sales copy that the developer uses to sell more systems. For example, most developers will claim that their system is \”set and forget\”, but I have yet to see one that can truly live up to that promise. At the very least, you need to consider high impact news releases like the monthly NFP and also the various interest rate announcements that affect the major pairs. Personally, I shut down my systems altogether during these event driven trading periods, because it\’s just not worth the risk.

Another critical mistake is not shopping around for a good Forex

broker with a competitive spread and good execution. If you don\’t know this already, the difference of even half a pip in the spread of the pair that you frequently trade can net you a surplus of hundreds of not thousands of dollars per year. Certain ECN brokers can offer you a spread of as little as 0.5 pips on the EUR/USD and 1 pip on the GBP/USD and AUD/USD, so if you\’re not getting that spread from your broker right now you should stop everything you\’re doing and find a Forex broker that does.

Finally, most people tend to jump in with two feet and trade their automatic Forex trading systems without doing any proper testing at the start. You are bound to make mistakes when you first begin trading any system, so why risk all of your valuable capital during this period? The first month of trading a new system should always be considered a trial period, where you observe and determine the benchmark performance of the system before you risk the full amount you planned to. Personally, I like to do my testing on a micro account instead of a demo, because a demo account will never replicate the real conditions of trading, and as such will give erroneous results.Winning With Automatic Forex Trading Systems

As the old saying goes, to succeed where others have failed, you have to do what the others failed to do. So knowing the common mistakes people make is one thing, but you\’ve got to make sure that you take the necessary action to prevent yourself from falling into the same trap of failure that they did as well. The most important thing that you can do to succeed where others have failed is to treat your trading as a business. Don\’t just \”set and forget\” your system, study it and understand how it works. Why does it enter positions? Why does it exit positions? Are you applying the correct money management strategy? All these things are vital!

Finally, don\’t be afraid to think outside the box. Whoever said that you have to buy the same old canned automatic Forex trading systems that everyone else buys? You can design your own from manual Forex strategies, or hire someone to do it for you! Divisa Capital

LP (\”DCFX\”) is an investment house incorporated in New Zealand under the Companies Act 1993 and registered with both the Financial Services Providers Register(FSPR) and Financial Services Complaints LTD (FSCL).

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