I long had dreamed of turning on a computer and having it do all the background work and actually make trades for me while I went golfing or something. On a dare from a trading partner, I decided to try them out. Trading robots or Expert Advisors as they are sometimes called, are quite the rage these days, judging by how many are offered. But do they actually work.
I decided to find out for myself, and after months of testing with various forex trading robots and systems, automated and manual, I realized that most of them do not work and have given me significant amounts of losses in the testing. Despite the number of robots that failed, there were a several that have delivered consistent monthly profits, and I continue to use them.
Trading is a numbers game, I am sure that is why I love it so much. What this means is that if you trade a system that has 6 winners for every 10 trades, it could still be profitable. I won't go into all the variables only to point out that all winning systems will experience losing. This is hard for some people and usually when emotion takes over and trading results go in the tank. Not so with robots, they just do what they do, I love it.
The systems all have different criteria for taking trades, moving averages, fib levels, stochastic levels, etc. Some are shooting for the big wins and others are just taking a few pips every day. The later group is what I found to be the most effective, as it keeps the losing to a bare minimum.
One good way to check whether any auto forex trading software is too risky would be to look at how much maximum it has lost on its back test results. Back test results are usually available on the robot's main website. The really good ones also have live trading results the update daily or every several hours.
An important feature would be, does the currency trading software detect changes in the spread of the currency pairs? If so does it take that into account for the positions that it takes? This means if the strategy is based on taking 10 pips a trade and the spread moves from 3 pips to 8 or more, does the trading robot know this and stop taking trades?
This is the one area where most trading software gets killed in real time trading. It is why so many currency auto trading software programs show fantastic historical results, and when you buy it and try it in a live market you get creamed. It is a huge factor in separating the winners from the losers in auto forex trading.