Why to avoid paid Forex robots or expert advisors? There are several reasons but most obvious one is quite simple — they don’t work as advertised. First, let’s get straight with the definitions — Forex robots are the same as the automated expert advisors, they are some trading strategies (sometimes advanced, sometimes not) embedded into a program code, which is most often intended for the MetaTrader 4 platform. There are many free expert advisors available on the popular Forex sites and forums and there are also many paid ones that are sold on-line. The price of such paid Forex robots may vary from as low as $20 for CaspianEA to as high as $499 for Dragonpips, while the average price seems to be near $100.
When it comes to the free expert advisors they are usually quite raw, require some optimization and tuning from time to time and work with minimal profit (even the best of them). As for the paid Forex software, it’s usually advertised as something complete — a ready-to-use product that will get updates for free from the author; it’s also advertised with an unbelievable level of profitability with more than 100% gain per month. So, what’s the problem with the paid Forex trading robots?
The most obvious question that arises when you see a Forex robot advertisement that promises huge returns in small time is why doesn’t the author of this robot use it for his own Forex account? Really, why rely on some on-line sales at $100 per piece with all the troubles connected with setting up a site for selling, an affiliate program, user support, etc. If you can just turn on this “money-making machine”? And if you are using it for trading and earn huge amounts of money from it daily, why bother selling the software? Want to share your success? Just let the traders download it for free! When I find a good EA that’s, in my opinion, capable of being profitable I share it for free on EarnForex.com; other honest traders I know do the same. So, if you are using a robot and it’s profitable, you already earn enough not to worry about selling it, and if you are selling a robot as a money-maker and not using it yourself, then that looks like a hypocrisy.
Verifying the profitability and the possible drawdowns of the paid expert advisors is very difficult, almost impossible. The advertisements display nice charts with the exponential curves of balance, suggesting a lot of potential profit from using the robot. But the problem is that all these test reports and statistics can be easily forged to showed any desired result. Some Forex robot-sellers use sites similar to MyFXBook to demonstrate the profitability of their EAs. And while this is really a good tool, it has some disadvantages, including soft demo account conditions with almost no requotes or serious slippage, fast quote changes, “market blackouts”, etc. At least many of the advertised Forex robots have some sort of money back guarantee declared, but I am not sure if these claims have something to do with the reality, anyway, it’s almost impossible to rightly estimate the usefulness of the EA in a 30-day period.
The whole Forex software industry is getting quite ugly lately. Quite a few paid Forex robots are advertised aggressively via rather generous affiliate schemes, which results in tons of spam over the forums, YouTube, e-mail and other parts of the Internet. Of course, it’s not the creators of the software who spam the web, but the affiliate marketers (and probably not the best of them) but that’s still a problem for the whole Forex industry. The ads often contain semi-false claims, wishful thinking and even outright lies, which is very dangerous for all the potential Forex traders. New traders may fall for such ads easily, resulting in a future disappointment in the currency market. People that don’t know about Forex might think that it’s some kind of get-rich-quick scheme (which, of course, it’s not) or some other scam. So, in my opinion, the paid Forex robot market is currently set up in such a way that it hurts the reputation of the whole Forex trading industry greatly.
That’s what I think about the paid Forex robots. That’s why you don’t see any ads for them on EarnForex.com. Of course, I might be wrong in my judging and you are free to believe otherwise. But the above should be a warning to the newbie traders, while I am quite confident that the experienced Forex traders are already wise enough to see what’s good or bad for them. Update: I have also added a related poll — Do you use Forex software? Feel free answer it if you are interested in the subject.
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