Retail Forex Robots~How Can They Really Work!
In the world of retail Forex Trading, many novices have been fooled into the wild claims, guaranteeing fast and furious profits, by the advertisers of Forex Retail Robots. Here are some of the ridiculous names listed below.
SuperPipbot
Forex Shockwave
FOREX MEGAPIPS
Forex Impregnable(Okay I made that one up they never use complex words)
Forex no-name bot (that was a creative marketer huh?)
There are to many to list. Evey week a new and tantalizing name is introduced.
Each one claiming more outlandish Pip gains then the last. Of course you need to buy the Robot now, because it will be gone forever in a week. You know only 14 copies left. I am here to educate you and clear this matter up once and for all, if you just choose to listen with an open mind about Forex trading. I am a true insider that knows something about trading being a retired Chief Dealer, and I wish to share with you the true story about Quants.
What is A Quant? Well a Quant is a Forex robot for a bank or hedge fund. Yes they do exist but are much more complex then the retail advertiser would like you to believe.
It will be almost certain that a smart Internet Marketer will find this article and put the term Quant in his copy.I sure he has never heard of a Quant, but he will Google the name and get all the cool facts to add to the copy. However those you you that read this can just laugh at the foolishness behind it all.
Lets start off with perhaps a bit of clarity. One of the most famous and successful Quants was the "Quantum Fund" headed up by Geroge Soros.
What is the Definition Of A Quant?
That is a super question, now your getting closer to the truth.
A Quant is an acronym for Quantitative Analysis. A "Pure" Quant Fund is one in which the computers do all the trading of currencies and securities. From what I was told, only about 15% of Hedge-funds are pure Quant Funds. No banks that I know of are Pure Quant Funds. Banks are a Human based group with the help of a Quant, more on that in a second.
In the other 85%, the trading institutions use a mixture of the computers order execution algorithms and human judgment of the traders.
The idea behind a Quant is very similar to the "sales hook" for the cheap and inexpensive Forex Robots. With some major exceptions. A Quant will by design seek out trades and they will not be swayed by emotion(A major issue, for retail traders,maybe the main one,they buy a robot because of.)and they will be faster then a Human without a doubt. However they are not employed because of Fear on the part of the trader. They are employed because they are part of the over all strategy of the trading institution. They are primarily designed to seek out trades that are based off very complex standard deviation models.
Retail Robots will enter a trade for you, and they will do it quickly. They certainly will do it without fear or emotion. Herein lies your major issues.
DO YOU KNOW WHAT THE PROGRAM DOES?
IS THE PROGRAMMER A TRADER?
Computers are funny little tools, they will only put out what they are told to do! You know the old saying from programming 101 "Garbage IN...Garbage out..." Out goes you cash with the trash as well.
The first important point that needs to be made is that people(traders) are responsible for all of the most important aspects of Quantitative Trading Systems of the Forex and Securities markets. Machines just implement the systems with speed and accuracy.
Traders and the research department would work together in order to obtain each of the currency and security specific algorithms.(No one size fits all here sorry.)The program would implement our criteria and do so in a logical and methodological way with the speed of automation.
Traders are in charge of the design of the trading system that the Quant follows
(The Traders are the Market Wizards)
In implementing this tons of data must be cleaned so that the it can be used in a systematic approach. This costs millions of dollars as scientists must be called in to add the scientific approach to the trading discipline that the traders deployed. Can You see where I am going here?
So I ask you, do you really think a retail Robot Is A Quant? If you do i have a bridge for sale as well, only $67.00
If you really want to learn how to trade don't waste your hard earned cash on $97.00 robots.Get some good books on traders and trading. Seek out traders to coach you. Just do something that will make you the wizard behind the curtain.
Article Source: FxTradingStock.com
About the Author
Tom Strignano is a retired Chief Forex Dealer for several International Banks in NY. He has over two decades experience trading Forex and is an accomplished author on theprofession. For more information on Black Boxes(Quants) see here. For a limited time you can access a copy of his Forex Extreme Ezine from his site.
by: Tom Strignano
Total views: 16
Word Count: 870
Date: Thu, 23 Dec 2010
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