You have a lot of forex robots to choose from and most claim they can make you thousands of percent in profit per annum but can you really make these gains - let's find out...
The answer is most track records presented by forex robots are not real money, there just a back test on data. Look at the really "to good to be true" track records and you will see the words "hypothetical" "simulation" all over them. They have actually made no real money! The vendor has just sat down and bought and sold on the charts and makes a profit because he can see the closes - but you can't do this is real life!
If you think about it, most forex robots claim track records that the worlds best fund managers would not be able to match and all for the price of a meal and a few beers.
Of course this is just fantasy land not reality and every robot I have seen with a simulated track record, will never make consistent profits and if they did the vendor would have the confidence to trade his own system and publish the results but of course he doesn't for obvious reasons.
Ok so now we have the simulations out of the way and got rid of the bulk of the robots its time to look at some with real track records over 3 to 5 years and the if you look at any good ones you will notice that
- They compound 25 - 100% per annum
- Drawdown on Equity ranges from around 25% - 50% with the latter being common number.
- Drawdown periods last from few weeks to few months
Keeping the above 3 points in mind when trading a forex robot you need to:
1. Look at long term gains and understand short term the system will swing heavily.
2. Be prepared to face a losing period that can last for months.
I trade an automated forex trading system and have done for many years and it compounds at 33% over a 5 year holding period and worst drawdown was 44% and it lasted for 4.5 months - so you can now see what you can expect. These are good solid gains and it takes me just 20 minutes a day - but you can see why you need to look long term and be disciplined.
Forget the fantasy, dream world of forex robot simulations and get into reality and understand this:
You can make great gains but you need to be judging your system long term - you don't get rich overnight but with compound growth, working long term you can compound massive gains.
You need to accept short term losses and be disciplined in your application. If you can do this, a good forex robot is a great addition to your forex trading strategy which can make a lot of money for very little work on your part and that's very attractive.
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1 comment:
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