Given the vast number of Forex robots it seems that Forex is the best market for trading signal systems. Sadly, this is only true in half. Forex is the best area for signal trading, but the reason is Metatrader, the platform that allows a seamlessly connection of your trading algorithm with your Forex broker. The second half of the truth is this: Forex is the worst place for trading on signals, because of its large phases of random fluctuations.
Don’t be fooled by charts. The longer you examine a chart the more patterns your eye will spot. Running backtests with Forex prices isn’t helpful either, because most of the gains will be made during news phases by trend following. The problem here is of course the enormous slippage one has to pay when trying to enter the market directly in event caused spikes and runs.
It is almost suspicious in itself that the market is divided so decidedly in two types of traders. Many believe in Forex scalping, and that percentage is greater than in any other financial market, and others believe in trend trading, probably because they found that scalping Forex doesn’t work.
Forex is a money machine. So far so good. Unfortunately this holds true only for your broker. For you it is also a money machine, but a special form of it, namely a money losing machine. At least if you try to crack the jack pot with the typical Forex robot. Why should this thing be better and able to beat what the big banks with their large development departments have created in years of hard work?
Right, there is no reason to believe in the work of Internet marketers who want to make a quick buck, hire some EA programmer to hammer out an amateurish algorithm and then brag with a phantasy trading history like hell. These guys are marketers, not traders.
There are many more scalping than trend following Forex robots. Why, may one ask. The reason is simple. A scalping robot will make many small gains and then blow away your capital with one big bang after playing the martingale. These robot marketers hope that this will occur only after the refund period has expired.
So, what to do with Forex? The simple answer could be, leave it alone and trade stocks. Trading signals in stock markets work at least. There are even trading signals for the penny stock markets possible, but they look very different to the ones for bigger stocks.
If you want to trade Forex, a wise suggestion is to do it manually. It is kind of sad to have a market open twenty four hours a day and a direct link from your wizard trading formula to your broker enabling a complete autotrading. But without positive results the best automated system is useless. Trading Forex with a combination of trend following and scalping by a human trader is the alternative to Forex robots. Still, the better alternative are stocks, even for you automated trading signal system believers.
