The deregulation of the Forex market, now offers small investors and traders the chance to trade the Foreign Exchange and this has given rise to vast array of automated Forex trading systems. These provide the home based trader with a ‘set and forget’ trading methodology, where the trader installs a Forex robot onto their brokers charting system, selects their criteria and the robot takes over. ..well that’s what is supposed to happen.

This is likened to finding the Holy Grail, and though there are some intriguing Forex robots on the market, thorough testing by experienced traders has exposed many flaws in the claims made by the creators.

Most of the Forex robot sales claims are based on historical ‘back testing’ results, not live account testing and depending on what system you are using and the substantiation of the historical charts you download, these will and do vary wildly. We have never yet been able to mirror the results offered on a sales page. Some Forex robots we have evaluated were quite brilliant at destroying our demo account, so approach very carefully.

Demo accounts have always been good at producing much better results that live accounts. Demo accounts will always fill a trade, whereas live accounts are subject to spread variations, slippage, and liquidity, plus broker quirks and lot sizes, just to mention a few influences. So as you consider this carefully, if a Forex robot wipes you out on a demo account, how do you think it will go live???

Much as I would love to, I am not going to list the Forex Robot failures, why? quite simply, I don’t want to get sued!

How does an automated Forex trading system work?

Each is different and reads different signals, an automated Forex trading system analyses and interprets its preselected series of indicators, then determines entry and exit strategies based on its interpretation. It opens a trade automatically, based on risk management parameters and aims to make a profit. It will also close the trade, based on exit strategy.

Most of the modern Forex robots run on Metatrader4, which is a very common trading platform and they require narrow trading spreads, often 2-3 pips, occasionally up to 5 pips. They often need time to “bed down” before they commence trading. Some Scalp, which is taking small quick trades and others trade over longer periods and all will have loosing trades. You must make sure the robot has stop loss strategies built in, some don’t, so be careful!!

This is another way Forex robots make their results look good. Without a stop loss strategy, they allow vast draw-downs, keeping the trade open until it returns to into profit. If the draw-down is large it can also send you broke since you may not have the reserves in your account to protect the loss, so your broker will demand extra funding.

If you don’t have the time to day trade and would like to use automated Forex trading, there are two Forex robots we use, these two robots are constantly updated by their developers, so we regularly watch their performance and keep them up to date, it’s all part of our financial management strategy for automated Forex robot systems.

To find out more about these Forex Robots, we review them on our new Blog, you will also find other Forex Trading Tools.

The most critical part of any type of investing, is being aware of what level of risk you are comfortable with. Without a good comprehension of this, the chances of you loosing everything are very high. There are many different types of trades you can make on the Forex, each possesses its own risk parameters and these your choice will be defined by your risk tolerance. Then there is your personal approach to trading, conservative, moderate, and aggressive.

 When you first come to Forex trading you may decide to trade a day chart. The bar movement over a day can be many of pips, so when you determine your stop position you have to assess what your drawdown limits are. If your money management stipulates a 3% funds exposure, you will encounter problems on day charts unless your account is large.

 The 5M or 30M charts maybe more suitable since the pip movement tends to be less, so your stop positions can fall within your management criteria.

 Yes, we all want good returns from out trades, but jeopardising ones account to significant stop positions and excessive draw-downs is going to clean out your account and trading career very quickly.

 A practical risk level is 3% or $300 on a $10,000 account.  Convert this to pips, 1 standard lot ($100,000) has a pip value of $10 so if you trade end of day and your stop loss placement, whether count-back or support and resistance or any other, indicates a 100 pip stop position, then you are not risking 3% but 30%! Three adverse trades and your account has vanished!

 An aggressive trader is open to taking riskier trades that a conservative trader. They will expose bigger sums or money in riskier trades with the hope of achieving larger returns – often over extended trading time frames but they may still use the similar strategies for shorter times as well. Very much the ‘crash and burn’ trader.

 So where do you think you sit? Are you a disciplined trader with correct money management and risk rates, or a trader that will take over the top risks with all or nothing gains? If you are the latter, you won’t be around for long, that’s a guarantee.

 If any of this leaves you a bit bewildered, you need to gain some knowledge, so commence your Forex training with Top Dog Trading, you will learn a huge amount and it will help you trade with safety to win pips not risk everything.

 Never trade without having all of the facts! Click Here To Get Your FREE Five Day Video Trading Course

The need to have a range of investment strategies is partly the reason many people are trading Forex. The track record of beginners is tragic with many losing a lot of money as the explore a complex marketplace. Apart from the mandatory requirement to develop trading strategies, there is also a requirement to test them…what if they fail? Why put everything at risk on un-proven principals?

There is so much a trader must understand to succeed. Forex trading demands practice, reinforcement, and repetition. It requires a comprehensive range of strategies and skills, so new traders need to use Demo accounts offered by most Brokers to help them protect their money as they grow.

A Forex Demo Account will give you real time functions, allowing you to trade the account as the market moves and changes through the day. Historical Forex data, which can be downloaded, is not set up for trial trading, and can only be used to test systems such as Forex Robots. For Robot testing historical data is invaluable, you will rapidly find out if a robot is does what is claimed. It also allows you to test different setting, you’ll find out very quickly if you have wasted your money and are hunting a refund.

Then there are Forex simulators, these allow traders to work on their trading rules without any risk and can be run for months of trading over a few days. Using a simulator, you can go back and forward, checking and refining every trading element. The traders can also get trade snapshots, test out the EAs that they like, and keep a trading logs to work on strategies.

You could liken a Forex simulator to online game. The aspiring Trader has a mission to accomplish, to repeat the game as many times as possible on different scenarios until they reach perfection. You commence with your conceptual strategies and ‘play the forex simulator until you find ones that start to produce results, it requires a lot of re-runs and strategy development, just the same as you need to be a profitable trader.

If you are well prepared before trying a live account, your risk of losing the lot is reduced considerably. A Forex simulator is a serious tool for traders who want to refine their skills before committing their own money.

If your Forex simulations are clearly defined and practiced then your success when starting to trade your own money improves dramatically. As a new Trader you are far more likely to avoid the Forex trading pitfalls that trap so many newcomers.

By using a Forex Simulator, you will become familiar with:

• A wide variety of the major Indicators
• Set ups, entry points and exit strategies
• Risk and Money management
• The influence of Support and Resistance Levels on market movement
• Different Time frames
• Your strategies and how they are influenced by different currencies

Think about it carefully, for only $150 you can test your strategies to your hearts content before you put your money on the line, compare that to the fact that almost 70% of all new traders fail and only between 5 & 7% of traders ever become seriously successful. This Forex simulator is not just a tool for beginners but also professionals, so if professionals use this tool, there has to be a very good reason why.

Go to Professional Forex Training Software and you’ll discover a Free 30 Day Trial low on the page, yes, its functionality is reduced, but at least you can trial it free of charge.