Different post today. I very much agree with this opinion about “robots”.

You have made a commitment to be an active forex trader. You have invested the time in training, testing your broker’s trading system with his forex demo account, and now you are ready to implement your personalized trading strategy. But, there is still this nagging voice in the back of your brain that wonders, “What do the experts know that I don’t? Are there tools out there that can automate my strategy and make me super productive? What am I missing?”

As if by magic, an email solicitation for the latest and greatest Forex Trading Robot arrives in your inbox, beckoning you to take notice and figuratively to skip down the yellow brick road to riches beyond your imagination. With the snap of a disc drive, you, too, will be able to automate your trading strategies, multiply your gains by unimaginable factors, and begin to trade “like the experts!” This offer has a certain appeal, but wisdom compels you to do a little due diligence before loading your online shopping cart.

 A quick look at Investopedia.com tells you that these robots are computer programs based on a set of forex trading signals that assist you in determining when to buy or sell a particular currency pair at any point in time. They are designed to remove the psychological element of trading, which can be detrimental! (My emphasis added!) It is rare that a source for a written definition will also provide a word of caution, so take heed!

 More research reveals the single “caveat” that has been repeated more often in small print than any other phrase that accompanies a trading software promotion, “Past performance is no guarantee of future success!” Robots and trading signal software providers are not deliberately trying to deceive you. They, too, believe that there is a magic “black box” out there somewhere that can perform miracles, and they hope that their latest addition will evolve to be the industry’s “Holy Grail” going forward. Data and testimonials are given that demonstrate the sanctity of the trading algorithms, but only based on historical data that has been carefully chosen. The forex market is cyclical in nature, so why not trust these programs to find profitable patterns and execute accordingly?

 The answer is that if it were that easy, everyone would be doing it and retiring at 30. Markets may be cyclical, but like our brains, we must always adapt our approaches as patterns change based on our experiences, both old and new. Financial markets are chaotic processes in which the prevailing rules change all the time according to dynamics, which are not well understood as of yet. Robots and trading signal software can be useful tools, but if you do not understand the constraints of the various decision making processes, you may find yourself backed into a precarious financial position requiring more capital than you would like to correct the situation.

 As soon as the written word became prolific, Mankind has attempted to substitute written rules for the task of exercising judgment. Forex robots and signal trading software are just one more example of this well intended pursuit. The paradox is that good judgment can only be developed by exercising bad judgment, a painful but necessary learning process. These automated tools can provide excellent support, but only if you understand the downside risks involved.

 So, before you deduct $500 from your available credit card balance, invest the time to determine how this tool will help you trade foreign exchange on a daily basis. Ultimately, you must be the one to exercise judgment over your trades. If you decide to delegate your authority to a machine, do so at your own peril!

You can read more on this website www.forexfraud.com Site has lots of good information and is worth checking out.

Mike K.