There's a lot of talk about Forex Robots laTely and the question on everyone's mind is – do Forex Robots work or is it all just a big scam to take your money? In this article we examine some of the facts around Forex Robots to see if we can answer this burning question.
When looking at back testing and forward testing results of some of the popular Forex Robots, there is no doubt that these systems have a very high success rate of winning trades. Most of these systems achieve success rates of more than 70% winning trades and in some cases even as high as 95%. While these values sound very positive, it is important to understand how such high success rates can be achieved and what the risks are of using these systems.
When comparing Forex Robots, one of the most important aspects to consider is money management. What type of stop loss strategy does the system use? What is the maximum drawdown that this system experienced in the past? One of the top selling systems uses a fixed 250 pip stop loss strategy, while the most popular system of all does not implement a stop loss at all. Some systems have a very high percentage of winning trades, but also have large drawdowns of more 30% at times, so the risk of losing a lot of your capital in one losing trade is higher. My ideal Forex Trading Robot is one that has a percentage of winning trades above 70%, with a maximum historical drawdown of less than 20% and a relatively conservative stop loss strategy that protects your capital.
In conclusion – Forex Robots definitely work and they can make you a lot of money, but make sure that you choose your product carefully and understand the risks involved.
Source by Chris Cronje