Many traders want to use automated trading systems but what is a realistic amount you can make with the best ones? Let's have a look at growth rates to drawdown of the best ones...
Let's take a look at the risk reward but first we need to have a reality check and it's the myth of the simulated profit presented by vendors repeating itself, when you trade the system.
Simulations disregard them
You will see a lot of robots claiming huge gains thousands of percent per annum in some case but keep in mind this is back test. This means the vendor gets a segment of data buys and sells wherever he wants ( knowing all the highs lows and history! ) and then puts it out as a track record.
Now it's pretty obvious, if you have all the data to hand, you can make huge profits even a kid could do it. That's not the world of real trading though its fantasy. In Forex, you have to trade without knowing the price and that makes things a little more difficult.
Let's move away from the simulations and look at some realistic numbers.
Growth Rate and drawdown
As a general rule the bigger the gains the bigger the drawdown.
In over 25 years of trading the best automated Forex trading systems I have seen ( and I have reviewed and tested hundreds) will generally produce 30 - 100% annualized gains over a 3 year holding period and drawdown is normally between 20 - 50% and the duration to recovery is normally 2 - 6 months and these are the best.
Never trust a system that says it has little or no drawdown. Check the track record carefully and look to see if its simulated.
Forex robot trading is actually not a quick way to riches it's a long term investment.
Of course you can make a lot of money over the long term but you will a losing period so be prepared to accept this.
Peak to Valley Drawdown
When you look at an automated Forex trading system, don't just look at the average drawdown look at worst peak to valley drawdown. This is if you had joined on the worse day and see if that fits your risk tolerance in terms of size and time to recovery.
Buy a System or Get a Free One
If you want you can buy a robot, avoid simulations and spend a bit more money and get a proven one. You can also get a few free ones that make money and we are big fans of the 4 Week Rule. This system is easy to understand, is proven over 25 years and has soundly based logic. Check out our other articles for more information on this one - its good.
So look at the long term shop around and you could soon be making 30 - 100% annualized gains in around 30 minutes or less a day with an automated Forex robot - do your homework and you will be well rewarded for your time.
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