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3 Major Problems With Automated Forex Software - And a Solution


If you are a really experienced forex trader, automated forex software can expedite your research and help you make better trades and more money. However, the problem is that most forex software is marketed to people who have very little to no experience trading forex. Those who sell this automated software would like these inexperienced traders to believe that they can make a lot of money using their software without knowing anything about forex.

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.

Forex Software Is Based on Backtesting

Most automated forex software systems are created by a partnership between an experienced trader who has developed some sort of winning forex strategy and a programmer who can automate that strategy. Sounds good, right? Well wait, there's a major problem. To develop the software, the programmer takes OLD data based on OLD trades and "backtests" the software. However, the foreign exchange is in a never ending state of flux and what worked well in the past probably isn't going to work well in the future. This is simply not something you can rely heavily on to make FUTURE trades.

The Software Can't Keep Up With the Volatile Forex Market