Auto forex trading is signals based. That is the cause the 'programs' recognise signals that are chart based and then execute an 'order' for your through your nominated broker based on interpretation of these signals.
If you're looking to get into forex, perhaps as a second income, opting for an auto forex trading system could be the kiss of death to your savings and investment!
Think of it this way would you hand $ 3,000 of your hard earned cash to someone you don't know to place 'bets' on computer program – I'd say no way! This is what you would effectively be doing if you went down this course of action.
Membership of the 90/10 Club!
This is the club where 90% of the traders lose money and 10% make money. You will have membership at the 90% level if you participate blindly.
Now, don't get me wrong there are some good programs out there – but they're as rare as hens teeth!
If you are starting out in forex you need to learn as much about the market as possible – you need to do an apprenticeship. If you think you can do this and make money with no knowledge, no experience and no work – you have another thing coming to you – it's called a 'hole in the pocket'.
OK that's my rant over – down to the business of whether or not these programs (the reputable ones) help make YOU money! Can They?
Yes and No is the Answer!
I'm not trying to be smart here. An auto forex trading program is automatic from the sense that you can program the levels (support / resistance), take profit, stop losses and various other pieces of market information that experienced traders know about – the difference is that it takes knowledge and experience to get this combination right and to be honest while many experienced traders sometimes use some form of automation – it is highly unlikely that they continue to do so on an ongoing basis.
In addition automated forex systems can make money in a trending market, which sometimes exhibit predictable behavior (ever heard of the trends you're friend?) But to be brutally honest, it's not hard for an inexperienced trader to make money in a trending market – so why should it be hard for a 'machine'?
It is unlikely that an automated forex trading system will make you money if you are inexperienced but it can help you make money if utilized as a 'tool' when you have more experience.
So what should you look for?
If you've got a lot of money to spend and want to try a system out then OK but at least look for the following essentials:
1. It is essential that any trading system that you select has a track record – not just for one month but going back at least 18 months and preferably longer (that's why they're as rare as hens teeth!)
2 Watch out for simulations! Many 'salesy' sites put in demo trades (Paper based) that show you how wonderful the days been – profits, profits and more profits! These simulations are often based on 'selected' favorable prices to show a profit – Ever seen one showing a loss?
3. Avoid super hyped up sites that claim no work needed just 'plug in and profit'.
This is a control and competence product. It is necessary to constantly adjust signals and trading parameters even when you are making both profits and losses and requires discipline if you are going to try and make a system like this work.
Having said that – if you have experience, and you have a large draw-down already built up in your brokerage account – then it's up to you but remember an auto forex trading system is not a profit machine!