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All forex robots have profitable track records yet most will wipe out your equity quickly and there is a reason for this its called curve fitting. If a track record is curve fitted then it won’t make you money and that’s why almost all forex robots give you losses. This will become clearer if you read this article…

First lets look at a warning that you will find somewhere in the small print which accompanies the track record. You will see the one below or very similar

“CFTC RULE 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading….. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown”.

So the track record isn’t proven in the real world of trading. Iis simply a product of back testing and the back testing is conducted in such a way that the robot is unlikely EVER to make any money in the real world.

A track record that is done in this way gives you everything that happened and of course in any area of business or life, if we already knew what happened, we could make our life’s much better and become much richer but this is not the real world.

we have to live going forward, not knowing what happened and this makes life and of course currency trading a little more difficult.

What normally happens is a segment of data is tested with some parameters or rules and these are bent to fit the data and show a profit. Take any portion of data you like, over weeks, months or years and you will never have prices repeat in the same manner of the test again.

The Concept of Curve Fitting

It’s a bit like getting a gun putting a blindfold on and shooting wildly at a door or wall and then afterwards, drawing a chalk circle around each one to make it look like a bulls-eye!

This is the concept of curve fitting and this why any forex robot with a back tested track record, needs to be treated with caution and discarded.

A simulation is no proof of profit at all as it’s not real. Look at it this way:

Someone comes to you and says - I will teach you to play Tennis but I have never played tennis in my life.

What would you say to him?

Well I would say no and you probably would to, as you would think what can he teach me?

It’s the same with a mechanical forex trading system - the aim is to make money that’s real money you can spend NOT paper money which you can’t.

The forex robot is one of the most popular options for novice traders and in most cases it’s a dumb choice but they buy them in there thousands.

Many vendors know that most traders won’t question or see the disclaimer and they simply use hyped up over the top advertising copy to sell the system

With forex robots it should be common sense no one is going to sell you a system for a few hundred dollars to make $100,000 income ( actually saw one saying this) its obviously not true.

Furthermore, if most of the track records were as good as the vendor claims, why do they sell it? They could make themselves millionaires and not bother with a few hundred bucks per sale.

If you want to make money in forex trading you can but you are unlikely to do it with a system that has never passed the acid test of making real dollars in a real time scenario.

So treat these mechanical forex robots with caution and remember, if it looks to good to be true it probably is and is a reflection of curve fitting data.

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