When you are right in the middle of searching for important information related to forex trading or forex market online, you suddenly start seeing numerous advertisements. Most of them tend to talk about the same kind of stuff, albeit with different brand names or trade names. It has become so common nowadays to get inundated by online advertisements that are promoting automated forex trading.
What is Automated Forex Trading?
Well, the actual meaning behind the word automated is to get things done without any human intervention. When you speak of automated forex trading, the meaning does not change much here and it involves trading of currencies using either a software or a robot.
Different companies or brands will give different names to their automated systems and will definitely be adept at creating brilliant sales pages. Beware! Their final aim is to convince you about the usefulness and miraculous benefits of their products.
And who in the world would not be excited to see loads of money flowing into their trading account without having to break their brains over the best forex trading strategy to use and price action setups to scrutinize? After all, that is what the creators of these automated forex tools are claiming to do for you.
So Should You Go the Automated Way?
Obviously, the sales copy has done its job well and you are now quite enamored. You have already begun to wonder if you should be going the automated way to becoming a forex trading millionaire.
These trading robots are installed on to your MetaTrader4 trading platform as a plugin and then it suggests currency pairs to sell or buy and also will give you a risk management script.
By this time you have started to visualize yourself on a vacation, enjoying the sun on some wonderful beach in an exotic location, because you do not have to even lift a finger and the forex trading robot or the software is minting money for you.
I am sorry to burst your bubble, but please open your eyes and snap out of your daydream. If you would attempt even a wee bit of research and try to look behind the scenes of these so called miraculously money-minting tools, then you would want to run for your dear life and escape from such stuff.
Why Should You Steer Clear from Automated Trading?
Well, the reasons are many, but here are some crucial ones that will definitely make you sit up and think. Do you know that the rosy picture they have painted with their captivating sales copy could be all made up and untrue? The best-looking track records could be fake and created on demand.
Huge Stop Losses
Also, you must know that most of these automated robotic systems will entail applying large ‘stop losses’. Now, even a newbie trader knows that larger the stop losses, greater are the risks involved. A single loss can wipe out your entire trading account and leave you stranded, which of course was not your goal when you spent hundreds of dollars of hard-earned money to buy these miracle creating automated trading systems.
Volatile Markets Are Unfavorable
Also these systems are designed to act in an effective way only when certain market conditions apply. If you needed just one good reason to steer clear of these automated systems, then this is it. Which trader worth his trade does not know that the forex markets are never stable and volatility is the general rule? These systems cannot handle the volatile situations and will invariably bring your account down with huge losses.
Additionally, it would help to keep in mind that these automated systems do not come cheap. Most of them cost hundreds and sometimes thousands of dollars and the cheapest could start anywhere at $800. That is surely a whole lot of money and you also need to brace up for any losses that these systems could bring in when they fail.
No Value for Money
You are not getting anything in return for all this amount of money except empty promises and you are not even getting trained to trade on your own in case you want to override the automation. So basically what you will be left with is a huge hole in your wallet and if you are unfortunate, you could also end up with an account shutdown or worse, i.e. loss of all the profits that you earned prior to using the automated systems.
If you ask me, the only place where you should invest your money is in acquiring some solid forex training that focuses mainly on helping you recognize price action and helps you develop the right trading psychology and effective money management.
Human Brain is the Best Tool
What do you do to prove the efficacy of any claim? Simple-you look at results and past achievement records, right? Well, the human brain has proven itself time and again, and was the first ever tool that was used to create all sorts of inventions, innovations, gadgets, softwares and gizmos.
Take a look at some of our great traders who belonged to a generation prior to the advent of such automated trading systems and you will realize how brilliant they were at their trades and also in developing efficient strategies. Well, the only tool they had was their brain and they obviously did a great job with it and were able to achieve outstanding results as well.
What you can achieve by combining your inherently gifted brain power and a solidly effective forex trading education can never be outrun by any automated tool or robot or software.