And a Solution - 3 Major Problems With Automated Forex Software
Introduction In an ideal world, you could go to any Forex trading system website, pick out the latest profitable Forex expert advisors and know that it would deliver on all the promises that were made by the seller. Obviously, it's not so easy to find a Metatrader EA that actually delivers the goods these days, so how do you find truly profitable EAs in the midst of all the junk that is out there? By the end of this article, you'll know how to spot the profitable expert advisors that are the real deal.
If you are just beginning to learn about the foreign exchange and even if you know a little but you aren't an advanced trader, I highly recommend you stay away from automated forex software. I think all you'll get out of it is a boat load of problems and the probability that you'll lose a significant portion (if not all) of your investment is quite high. Here are 3 major problems with automated forex software:
Forex Software Is Difficult To Configure No software is really FULLY automated. Before you start using the software, you will be asked to "configure" it. You will be setting preferences and you will be asked to make several choices. Here's the problem. This set-up assumes you already know quite a bit about forex. If you don't, you will not be able to make intelligent decisions. Remember also the old expression, "A little knowledge is often more dangerous than no knowledge." Just because you've studied up doesn't mean you really know enough to make good decisions regarding the set-up of the software. Forex is a VERY complicated topic. Frankly, unless you are an advanced trader, you probably don't know enough to make wise choices.
If you've studied the forex strategies written by experts, there's a good chance that the information was out-dated the moment you received it. Then, by the time you read it and digest it and figure out how to implement it, it's REALLY outdated! So what do you do? How do you make money with forex? How can you get around the problem of out-dated information in the fast paced every changing world of forex? How can you receive real-time information that is based on techniques that are working right then and there?
The Software Can't Keep Up With the Volatile Forex Market I probably can't emphasize this enough to make it really sink in but I want to try to save you from making a big mistake. The forex market is EXTREMELY volatile - VOLATILITY is what makes it so profitable if you're an advanced trader but it is also the main reason most people lose their investment. The better software attempts to remedy this problem by providing frequent updates, aka "software patches" (some manual, some automatic). However, it's never quite fast enough to really keep up. Also, no matter how well the software is programmed, no matter how good the strategy was that the software is based on, it can not be programmed to deal with every unexpected news event that affects the forex market. It is quite common to see the foreign exchange go on a roller coaster ride or follow a totally unexpected pattern after such a news event.
For the 3 reasons above, it is best not to use automated software unless you are an advanced trader, and even then, it is best to just use it as a tool - i.e. you don't want to rely too heavily on it for your trading decisions.
If and when you do find a service like this, you need to understand how valuable and rare it really is and hop on that opportunity as quickly as you can because I predict this type of service won't be around forever.
Profitable expert advisors are hard to come by, but now you're equipped with the inside knowledge of how to weed out the junk so you'll find one much faster than you would have otherwise. The most important thing in your search is to recognize that you need to verify the results for yourself before you trade it with real money. Once you have done that, then you can rest assured that you really do have a profitable EA on your hands.
Article Source: FxTradingStock.com
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by: Harris Smith
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Date: Fri, 15 Apr 2011
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