The Best Forex Trading Robot – Which One Is Better?

April 13, 2010 - PRLog -- Do you looking for some kind of automated trading robot to help you? There are a wide multitude of so-called forex robots available today and they all promise to turn your computer into a literal ATM that prints endless cash. Hopefully you realize that this isn't possible, but what can you do to make sure that you get the right forex trading robot that performs as the creator claims? Instead of purchasing the software and crossing your fingers, there a few questions that you should research thoroughly before making your decision as to which one to purchase.

These questions involve the validity of back testing data and the kind of drawdown that is expected. Answering these two questions will ensure you have done everything possible before making a purchase.

A)   Back testing

It is extremely important when it comes to automated trading software. The problem with back testing data is that it can be enhanced or skewed. Many trading robots are built using historical market activity and while they show excellent back testing results they never perform in a similar fashion during live testing. Why is this? These robots were optimized using historical data. Their creators simply continued to modify and edit the parameters of the trading robot until it produced favorable results during back testing on historical data. What this means is that while the robot looks great on paper it will never perform in a similar fashion when tested live and on future market data. What can you do to ensure you don't get a trading robot that was designed in this fashion? Ask the creator for proof of live testing results. If they can show you results of the robot trading on live data, then there is a good chance that it will perform as their testing shows.

B)   Drawdown

It is another topic that many traders looking for forex trading software fail to ask about. Drawdown is the maximum unclosed loss that the robot experienced at any given time during its trading. Some trading robots promise 20% or higher monthly returns, but the creators fail to reveal the amount of drawdown that was experienced during that period. It is very common for some robots to experience drawdowns of 50% or more. Would you be willing to risk 50% of your trading capital to gain just 20%? This is a very serious problem and it is quite easy to produce profitable trading robots if you are willing to let drawdowns reach 50% or higher.  (Read more here >http://www.smartplacestore.com/?page_id=463.html).

The problem with this is that most traders could never emotionally withstand such a dramatic drawdown. It would only take one losing trade to completely wipe out all previous gains and your trading capital along with it. This is why it is essential that you make sure you get as much detailed information as you possibly can about what the maximum drawdown of the forex robot was.

Would you like to make finding the best forex trading robot even easier? I've collected together what I consider to be the best automated trading programs and have provided a brief review of each one. You'll see at a glance what the robots can do and it will make finding the right automated trading software >http://e60a7koqpcw9dsf15c4ml4bu61.hop.clickbank.net/?tid=FXDROID  for you super easy.