Tuesday, 23 August 2011

Why Do Many Forex Professionals Avoid Using Forex Robots?

You will probably have noticed that there are hundreds of forex robots (or expert advisors as they are often known) being sold online. However if you look at the kind of people that buy these robots, they are not the professional traders. They are usually people new to forex trading who are looking for an automated way of generating profits from the currency markets.

So why do the professional traders avoid using these robots?

Well the answer is simply because you cannot rely on them to make money with any great confidence. If many of them were as successful as they made out to be on their sales page, then all the pro traders and all the major banks would be using them to generate huge returns.

Of course you are not going to get a robot like this for $97, which is what many of them retail at, which is why many experienced traders stay well clear of them. Instead it is the people new to currency trading that often snap them up in their droves because they mistakenly believe the hype, and think that they are going to get rich by using one of these expert advisors.

The reality is that the only real way of making money is by developing your own system and trading the markets yourself. You also have the luxury of being able to adapt your system should market conditions change. With forex robots it is often the case that they generate decent profits for a while, but as soon as market conditions change slightly, the losses mount up very quickly because they are inflexible.

I'm sure there are some profitable robots out there, but it is highly unlikely that the really profitable ones would be sold to the general public anyway. They would probably be sold to a major bank or financial institution for a six or seven figure sum instead.

So the overriding message is that you should be very wary about rushing out to buy one of the many different forex robots that you see being promoted online. Many seasoned traders have learnt to stay well clear of them because they are often unreliable and will nearly always lose money at some point. You are much better off developing your own system because then you only have yourself to blame should you incur any losses.

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