I have traded for over 22 years and still see people trying to buy success via cheap automated Forex software and they fail to make money. Below are six reasons, why most cheap Forex robots lose money. So let's look at the claims made by the vendors which can help you spot a loser and then, look at how to make money with Forex software which is not known by many traders.

  6 x Myths Traders Believe about Robots and Making Money in Forex

If you are considering trading with a Forex robot then read on and it could save you a lot of moneyOf course, the myths below, are put forward by vendors of cheap Forex robots to generate sales and believe any of them, and you will end up with a system which will destroy your account.

1. You Can Trade with 90% Accuracy

This is rubbish and anyone who has traded knows it. The best traders in the world don't do this and they earn millions or hundreds of millions in salaries so don't expect a cheap robot costing a hundred bucks to do it. Also the accuracy rate is NOT important, its the difference between winners and losers which is.

2. The System Uses Sophisticated Algorithms to Predict Price

Again another stupid statement – Forex markets do not move to mathematics and therefore, there is no way to predict the future. Any system which claims it can, will end up being as accurate as your horoscope. You can win but you must see Forex as an odds game and that means trading the reality of price change and not trying to predict.

3. The System Uses Artificial Intelligence to Beat the Market

this is perhaps the most amusing claim of all. The vendor of the robot claims, the system can think and adapt to market conditions and make money. Well the most sophisticated artificial intelligence robot ever developed, was by Berkeley University in California last year so lets see what its capable of doing:

They managed to built a robot which achieved a major breakthrough in artificial intelligence - it could pick up and fold a towel!

This is a finite object and in a set place and compare this task with trading Forex markets which are a moving price and the price is made by humans who are unpredictable. I find it amusing, there are so many vendors claiming they can beat the market with this method, when its obviously not true.

4. The Programmer is an MT4 Programming Genius

Linked to the above, mathematics is of limited use in Forex and anyway the so called “genius” doesn't even exist and is just sales hype. Forex trading is an odds market and all you can do is trade probabilities, you can win doing this but make a system too mathematical or complex and it will fail.

In fact, mathematicians generally make bad traders because they make clever systems which are to complex and break. The best traders I know, are ones who are good at poker and this is because they know how to trade the odds and use simple robust methods they execute with discipline.

5. You can Make X Amount Every Month

The figure varies but again another statement which is not true – you cannot make a steady income in Forex each month because trading conditions change. This should be obvious to anyone but naive and greedy traders believe and learn the reality which is a quick loss of equity.

6. You can Trade for Huge Gains with Less than 10% Drawdown

Again this statement is rubbish - big gains means drawdown in the short term. Sure a system can make big gains longer term but in the short term ANY system (even the best) will lose money and draw down for a few months at some point before a new high in equity is made.

You can of course make money longer term trading Forex but you will have periods of losses and any vendor who claims otherwise is lying.

So How do they Get Track Records that Looks so Good?

Well there either simulations going backwards, where a system is bent to past data to make a profit manipulated, where the vendor only shows closed profit and not open losses or simply made up.

Ever seen one of the cheap robots present an audit of results by a reputable auditor? Me neither. If you see systems that look to good to be true, they are and that's a fact.

Can You Make Money with Automated Software?

Yes but the reality is the best systems in the world make 50 – 100% per annum which are great gains but keep in mind draw down will be typically 30 – 50% and can lost for several months on end.

If you are disciplined and prepared to look long term, you can make money trading with automated systems but the reality of trading automated systems is one of patience and waiting for long term gains with a lot of short term volatility. 

Think About Before You Use an Automated Trading System

Most people simply don't have the discipline to follow mechanical systems and if you are one of them, why not do what all successful traders do and get an education and learn how to trade the odds?

Anyone can learn to trade - but few people bother to try and get the right education and feed robot vendors with a regular income and end up joining the 90% of losers.So if you are serious about making money at Forex treat it as a serious business learn the basics and you will soon be making big gains in around 30 minutes a day.

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