The dream of many new Forex traders is to find an automated Forex trading system, simply plug it in and watch the money roll in. While you can make money on autopilot, the reality for most traders is a loss. So how do you win? Let's find out.
There are two major problems you face when looking for and executing an automatic trading system.
1. First You Need a Proven one NOT a Simulated One
Most forex robots sold online are proud of there track records of profits, despite the fact there simply a paper simulation, knowing all the prices! They expect the buyer to take this as evidence that it will make real money and many traders do. There is a problem here though...
The system has made money knowing the closing prices and that's not the reality of trading. Anyone, even my 10 year old nephew, can make money knowing the result in advance but that's nor real trading or real money.
So you need to find an automated forex trading system with a real track record over a period of time, there area few about and there very good for long term traders. Now we come to the second problem which sees traders fail even with a good system that could make them profits.
2. Discipline of Application
The simulated forex trading systems never have any real losses of any real duration (because there simulated) but the real world is - you get profits long term but you will suffer drawdown short term.
Drawdown depends on the system used. Typically, it will be few weeks to couple of months and you need to ride these losses out. You need to keep executing your trading signals and stay on course until you hit profits again and its not easy! Maintaining discipline when the market gives you loss after loss and makes you look a fool is hard. So how do you stay on course?
Work out the worst drawdown and put your stop below it. Always assume your worst drawdown is ahead of you. Then learn the logic and make sure you agree with it - if you don't have confidence in the logic you won't have the discipline place your trading signals in line with the rules and if you don't have discipline to execute your system rules, you don't have a system.
Look Long Term
Automated forex trading can and does work but its not all profits and no losses as the vendors with simulated track records would have you believe.
In reality you have to look long term minimum a year or two and ignore short term draw down and stay on course. If you can do this then your forex trading strategy will yield you a great income in around 30 minutes a day and you can enjoy currency trading success
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