Depending on who you are, saying Forex Robot may bring visions of Talos, Robby, R. Giskard Reventlov, Roy Batty, Skynet, Sonny, R2D2 or even Data (I apologize that my inner geek is showing.) As much as I would like it, a Forex robot is not quite as romantic as all of that. A Forex robot is simply what I’ve been discussing in my articles for the last week or so, Forex trading software or automated Forex trading systems. There are hundreds, or possibly thousands of Forex robots available on the web for as little as free to as much as thousands of dollars. I think you’ll find that, as opposed to other areas, price has very little to do with quality in the robot market. I suggest you consider the following 5 items when looking for a Forex robot:
1. Company Reputation
The first thing to consider when looking for a good Forex robot is the reputation of the company offering the robot. How long have they been around? Can you personally contact any of the company’s principals to ask questions? What have you heard about this company? With that question, keep in mind that with the Forex business, there are many factors that make a trader profitable and most of them are in the trader’s mind. So, only consider other people’s opinions if you know them personally, or if the preponderance of the opinions are negative – there is always one or two “negative Nelly’s” that won’t be satisfied no matter what happens.
2. The robot’s trading strategy
One of the most important things to consider with any sort of Forex robot is, what strategy is the robot automating? Is it a well-tested strategy? Does it include proper risk management? Does the company reveal the strategy upon which the robot is based? It’s usually not a good idea to use a robot based upon a strategy that you don’t understand. It is a good idea to test the strategy manually before investing too much in a robot. Also, no strategy wins 100% of the time (unless it’s based on time travel), so don’t buy into that hype.
3. Company Test Results
Look over the company’s own results of tests of the robot and the robot’s strategy. Be sure the risk parameters are acceptable within your personal trading plan. Don’t be influenced by talk about how much the strategy made or can make. Take it all with a grain of salt. Don’t be afraid to ask question.
Search for reviews of the robot and it’s strategy. Look at reputable sites such as Forex Peace Army and the Forex Factory forums. Forex robot marketers will often create fake review websites and give glowing reviews of their own products, so make sure you are not looking at those sites. Also remember about human nature, if someone is disgruntled or angry they are more likely to post a negative post while the many happy customers say nothing. Be sure to read the reviews – you can usually tell if it was just a personality issue rather than an actual problem with the robot.
5. Personal Test Results
Once you have decided the company selling the robot is legitimate and the strategy and company’s test results measure up, run your own tests on a demo account. Be sure to forward test as well as back test. Testing doesn’t tell the whole story, but you definitely won’t get any story if you don’t do some of your own testing. Again be sure the strategy conforms to your personal risk parameters as well as performs successfully. And remember – one week’s testing rarely gives you any indication of a successful strategy. The market changes from time to time and a strategy that’s successful for a time can become instantly unsuccessful and vice versa.
There are many Forex robots available that are profitable. Be sure to do your due diligence in finding one.
Thanks for your attention. And please follow me on twitter.
Winner’s Edge Trading, as seen on: