Forex Automated Trading Systems

There will always be a way to exploit those who can be exploited. What do I mean by that and how does it relate to trading the Forex market using an automated trading system?

People all over the world want to make money. Many want to make money without working or want to put their money to work while they play. If we happen to be wealthy enough that is possible if we invest it with the right people; at the right time. Sometimes however, money we invest is with people who don’t really have our best interests in mind. They are only out to exploit us for their own personal gains.

If you are new to trading Forex should you buy an automated trading system to make money for you? On face value, that seems to be a great idea. The Forex market is the largest financial market in the world and turns over the equivalent of $500 dollars for each person in the world every day. That is an enormous amount of money changing hands.

Wouldn’t it be nice to go to bed every night knowing that in the morning an automated trading system would deposit $500 dollars into your bank account five days a week; $2500 each week or $130,000 per year. The foreign exchange market doesn’t take a vacation except for the weekends.

One hundred thirty thousand dollars each year is more than two times the average yearly income of an American worker. So when someone learns about how an automatic trading system is 95% right on its trades and can make thousands of dollars overnight, there are lots of takers.

But the proof of whether they work is in the results. As a Forex trader for nearly 5 years I can tell you that the world is not getting richer on automated Forex trading systems. If they were you would know about it in particular when you take those summer vacations to the beach where people you meet would tell you of their new found life-style; just put $20,000 in a Forex trading account, install the automated trading system and before long you can quit your job.

Unfortunately this has not happened.  Why doesn’t it work?

First, programming a computer to understand and evaluate the global economic complexities of central banks, large world banks, hedge funds, corporations and retail traders would require more than genius it would require knowing the future. Computers have shown they can beat a human at chess but the moves involved of one country in regard to another in regard to another ad infinitum would be literally impossible.

Take for example, the credit crisis of 2008. Few people knew, even the world’s economists and sharpest minds, that this was about to occur. If people who make their living didn’t know this kind of information, how could programmers program it into their system? They simply couldn’t do it.

Secondly, if you are new to Forex how would you possibly know of the thousands of systems that are out there offering an automated product, which one to buy? Who would you trust? And people who design these systems rarely divulge what their system uses to decide its signals. Typically they are only a mix of indicators and moving averages which have nothing to do with understanding the future movements of markets.

The last point I will make is the most telling. Typically when someone is selling something that will make you thousands, if not tens of thousands of dollars for less than $200 – the cost of many of these systems, or less – your eyebrows should raise and you should walk away. The product is being priced so that you will make an impulse purchase and so that if it doesn’t work you will feel like you didn’t waist hundreds of dollars.

Automated Forex trading systems are more about marketing to the desires and wants of people than to the reality of what it takes to make a sound financial investment in a market such as the foreign exchange market. Money can be had certainly but not with a get rich quick scheme. Save your money and if you are interested in beginning to learn Forex consult some books on the subject.