Do Automated Forex Trading Systems Work?
Do Automated Forex Trading Systems Work?
In this blog post, we will answer the question: Do automated forex trading systems work? It might surprise you to know that I am here to tell you that they do not.
The reason for this is because there are so many variables when it comes to the market and in order for an automated system to be successful, it would need a level of complexity which is impossible. We’ll explore why below.
Automated trading systems work on the idea that they can analyze every possible market scenario and be able to make a trade which capitalizes on it.
This is an impossible task because of all the variables involved in trading, such as time horizons, geopolitical events, economic reports, sentiment changes and so much more.
In order for an automated system to respond quickly enough, it would need access to thousands or even millions of years worth of data about past market behavior – there’s just not enough information in existence currently for this type of analysis.
Plus if there was automation software out there which could do what we’re asking them to do…it would have been created by now! There are countless programmers around who spend their days working on algorithms trying to predict where Markets will go.
There once was a case where i heard of a firm trying to capitalize on the spread of a market, but they could only do so if the market was in a certain range.
Forex trading is a lucrative business. However, it is also one that requires skill and knowledge to be successful.
The best way to learn how to trade successfully in the forex market is by learning from professional traders who have spent years studying and developing their strategies.
There are many trading systems out there that claim they can make you rich overnight with little effort on your part. Unfortunately, these systems rarely live up to their promises.
If you want a chance at success, you need an experienced trader guiding you along the way who has been through every situation before and knows exactly what works and what doesn’t in this fast-paced environment where money can be lost or made within seconds of placing a trade.
When i first got into the forex market, I was sold a system for 100 bucks that promised it would make me 2-300 a day. Do I really need to take this story any further?
Yup you guessed it the system never made any money what so ever, truth is we as humans always tend to look for the easy road. Only to find that it really is not that easy. And that is what keeps these folks alive today, is the fact that folks will always look for the easy buck and buy these systems.
Best way to trade the forex markets is to have a solid plan and stick with it, because if you don’t then there is no way that the system will work for you.
Pick a time frame and stick with it, and a system if you will, and stick with it. Trading really needs to be a passion for you or you really won’t make it.
Be Patient In Trading
Patience needs to be in your life when it comes to trading, I can not tell you how many times I have closed a trade, Only to see it go my way. So trust me when I say to you, slow down and get patient in the markets.
If your in a panic in the markets, there really is only one reason you would be in a panic. And that is you have to much on the line in your trade. Meaning you are over leveraged. That is the leading cause of traders crashing in the markets.
With a failure rate in the 90% range for most new traders, why do you think this is? Simple, these firms know your gonna go all in and loose all your capitol right away.
Stick With A Trading Plan
Sticking with a trading plan is key in market trading, if you are all over the place with your trades. You will loose money and probably not make any. It is always better to trade less but smarter then just more reckless like most traders do.
The best thing for Forex traders is to have a long-term plan that they can stick too no matter what happens in the markets. Trading should be a game of patience and being able to take losses when needed, especially early on before you know how much risk you want to take on at one time. So follow these simple steps above and don’t let my story happen again!
Finding a trading system that matches you is really key for any trader. My buddy who has been in the markets for some time said it the best, trading is very personal. Meaning, you really need to find a style and system that is more like your style. No matter if it is a scalp, or swing trader.
When it comes to automated forex systems, they absolutely do not work, if that was the case we all would be rich. And yes to save an argument. I do realize there are firms out there pumping ,millions of dollars on a algorithm style trading. Since all the floor traders no longer exist, they think this is the best way.
I have said it over and over in this blog, find a system and time frame. You will have losses, that is trading my friend. This is the easiest way to stay ahead of any troubles in your trading career.