Automated Forex system trading has received a lot of attention lately as a great way to make money working from home. These Forex packages, or robots, can make trades automatically which can free up your time and make you a good amount of money. I test and evaluate this type of software because I trade Forex for a living. If I find one that makes profitable trades consistently, I keep it. Otherwise, I send it back to the vendor and get a refund. It is important to find Forex software that can make winning trades even through the toughest of economic conditions.
Here are the top 3 things you should look for when evaluating this type of software if you want to make good money in automated Forex system trading:
1) How Does The Forex Software Perform On Historical Back-tests?
Forex software packages that integrate with trading platforms such as MetaTrader 4 can be run against historical data to simulate the decisions and order placements the automated software would have taken. This can provide a reliable gauge as to how the software will perform in the future.
An important statistic to look for in your back-test results is the win to loss ratio. The win to loss ratio will tell you how many times a winning (profitable) trade is made in proportion to how many times a losing trade is made. For example, if the automated Forex system made twenty trades, and 15 of those trades were winners, and five were losers, your win to loss ratio would be 15 to 5. This is also known as your hit rate; the software made 75% winning trades.
2) How Does The Software Perform On Forward Tests?
Perhaps more important than back-test performance is forward test performance; or how well the software performs in current market conditions. Put simply, back-test results are generally useless if they are not verified with live forward trading results.
Made available by most Forex trading brokers are demo accounts, where you make live trades but don't risk real money. Due to the risk involved in Forex trading, it is recommended that someone new to Forex trading use a demo account for the first couple of months to get a feel for the software's win-loss ratio. When trading on a live account, ideally the Forex software will match or outperform the back-test results.
3) Risk Scaling Automation
Automated risk scaling is possibly the most important factor to look for when evaluating automated Forex system trading software. Risk filters and indicators should be built into profitable Forex trading software. This will help prevent the software from trading in risky conditions and will help minimize the number of automated trades made by the Forex software during risky market conditions and reduce losing trades. - 15224
Here are the top 3 things you should look for when evaluating this type of software if you want to make good money in automated Forex system trading:
1) How Does The Forex Software Perform On Historical Back-tests?
Forex software packages that integrate with trading platforms such as MetaTrader 4 can be run against historical data to simulate the decisions and order placements the automated software would have taken. This can provide a reliable gauge as to how the software will perform in the future.
An important statistic to look for in your back-test results is the win to loss ratio. The win to loss ratio will tell you how many times a winning (profitable) trade is made in proportion to how many times a losing trade is made. For example, if the automated Forex system made twenty trades, and 15 of those trades were winners, and five were losers, your win to loss ratio would be 15 to 5. This is also known as your hit rate; the software made 75% winning trades.
2) How Does The Software Perform On Forward Tests?
Perhaps more important than back-test performance is forward test performance; or how well the software performs in current market conditions. Put simply, back-test results are generally useless if they are not verified with live forward trading results.
Made available by most Forex trading brokers are demo accounts, where you make live trades but don't risk real money. Due to the risk involved in Forex trading, it is recommended that someone new to Forex trading use a demo account for the first couple of months to get a feel for the software's win-loss ratio. When trading on a live account, ideally the Forex software will match or outperform the back-test results.
3) Risk Scaling Automation
Automated risk scaling is possibly the most important factor to look for when evaluating automated Forex system trading software. Risk filters and indicators should be built into profitable Forex trading software. This will help prevent the software from trading in risky conditions and will help minimize the number of automated trades made by the Forex software during risky market conditions and reduce losing trades. - 15224
About the Author:
John Hansen has several years of Forex trading experience and banks on automated forex system trading to make winning trades. Click here now to unlock the code to profitable forex trading software online!
