It’s never long when you’re starting out in forex before you come across a site offering an automatic forex trading tool. Their’s, of course, is the best ever…

It’s the ideal solution in the market that never sleeps (except at weekends).
All you need is a hundred bucks to make your first trade – then you’ll have the mega money to invest and make a serious pip profit…
You don’t need to know anything about boring things like the markets, technical analysis, your new forex friend will help you through.

Back-tested Results
Computers aren’t bad at number-crunching these days – and this allows for building great hindsight trading systems, so be very careful about interpreting the claimed results. It’s not difficult to take a set of results and build the system that would have made a serious pip profit – that is, doing everything in reverse.

It’s the story of the 100 bulletholes perfectly through the centre of the 100 chalked circles in the wooden fence – he shoots and draws the circle in afterwards…

Frankly, a lot of the data that is attached to the expansive claims – “hey look at the results at our winning system” has been done using just that method, which is, equally frankly, fraudulent. And, of course, going forward is an entirely different story – the guarantee doesn’t extend that far…

Blackbox forex systems
Watch out for “black box” systems. What’s going under the hood?
Any forex trading system that don’t tell you how the signals are being generated. Hmm, maybe better to do a bit of learning, understand forex signals for yourself and do it all manually – but you want to do forex for yourself, don’t you? Usually they have a simple recipe involving moving-average crossovers, or Fibonacci retracment levels etc. It’s never enough – if it were that simple…

Automated scalping
(See forex scalping if you’re not sure what’s going here). A murky area, and not all forex brokers are happy at the idea – I have seriously come to conclusion that it’s best to be with a broker that says “no scalping, no way”, rather with one that has an unclear policy, which is always open to (their) interpretation.

These run as plugins for your trading platform, as expert advisors for MT4 etc., and scan through currency pairs looking for trading opportunities, so you don’t have to – yes but they will also be triggering trades, using your money, while you’re asleep? Good idea? Any flaws possible?

Conclusion
Black box systems? Black is usually the word.
Automated forex tools? Avoid.

2 Responses to “Trading Forex with Automated Tools”

1. Trading Forex with Automated Tools says:

   January 21, 2009 at 12:09 pm

   [...] Original post by ForexPerform [...]

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2. Forex » Trading Forex with Automated Tools says:

   January 21, 2009 at 4:02 pm

   [...] It’s never long when you’re starting out in forex before you come across a site offering an automatic forex trading tool. [...]

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