Reverse Engineering Automated Forex Trading System


Authored by Christopher Reed in Forex Trading 
Published on 12-06-2008

There are many automated forex trading systems online that claim to be the best in terms of gaining profits. But the truth is, only a minority of these are able to truly fulfill their vision and leave traders with a huge stream of income. This article will bring you the details about these automated forex trading systems and how much profits you can expect from these. This can also help you answer the question: “Is my money worth this system?”

The forex trading industry is known to be the biggest of all the markets there is. However, it is also known for its bad reputation when it comes to automated forex trading systems which almost always do not deliver profit gains. To be able to discern a genuine system from those which are not, we need to base our choices on a system’s track record. Check and see if it’s operating a real trading or just a back test simulation of the forex market.

Many forex robots claim that they have a superb “money-making capability” thru back test simulations. However, back tests do not really prove anything. In other words, back tests can be easily fabricated in order to make up a commendable track record. When choosing a forex trading system, make sure that you don’t solely base your decisions on track records alone. Okay, so it is really tempting when you see a system with an almost perfect track record – with lots of gains and no losses. But chances are, these track records are merely paper simulation.

What do we do with those with proven real track records? Are they really efficient in terms of giving you more profit? With a good system, you can expect a hundred percent gain on high risk setting. You can also expect periods of losses for the first few weeks to months, but don’t worry as this is normal. 30% – 50% loss of equity can also be anticipated.

If you really want to assess any system’s capabilities, you have to look at it the long term. A three year holding period is enough to assess whether a system has brought you more gains than losses. Short term wouldn’t show significant results.

Before engaging to any transactions with your forex trading system, you have to first understand how your system works. This will give you the patience to stay with it so that you can evaluate in the long run your system’s potential.


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