Automatic Forex Trading - Where Is The Catch?

[Stayer]

Before I considered currency trading to be time consuming and stressful endeavor but a few days ago a friend told me about automatic Forex trading system with a robot he's been using for awhile .

Last night he helped me setup Demo account for 5000$ which made 56$ overnight. I can understand how the robot makes deals - it short sales the deals to be safe and does a lot of them which is not possible if you're a human. So the question is -

How can it lose money? The only reasons I found is if the computer goes offline and starts trading based on old data after reboot.

And why not everybody uses it yet?

 

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[Guest12120]

I used it. Lost money. Also was making a lot during the demo run but when the account went live I quickly lost $500 and that was the end of my forex experience. Don't recommend it to anyone.


Sent from my iPhone using Tapatalk

 

[chrischapman]

The catch is that nothing is foolproof and you can lose a lot of money very quickly if your investments are not as liquid as they should be. Yes, you can make money, but there is certain risk.

Don't recommend it to anyone.

Most people lose money on this stuff and most bots are not great.

It is not fastlane because as MJ says, it is a probabilities thing and most of these sorts of plans fail for people. Not all, but most.

I got some advice from a successful older friend recently who manages a large company now but has been an entrepreneur for most of his life, he said basically: "If you lend money to a friend or family member or invest money in someone else's venture, consider it forfeited. If you make money/get it back, then fantastic but to expect anything else would be putting at risk relationships and your livelihood"

Invest money with these bots if you are prepared to lose it. Do it once you already have stable finances and money to play with.

 

[Kyle Tully]

I know people making millions with these robots... They sell them


Sent from my iPhone using magic.

 

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[loop101]

How can it lose money? You should ask your friend exactly that. Most Forex bots add to their losses while they wait for a reversal. The reversals usually come, so the bots continue to make money. Until the day the price keeps going, and going, and going. Then you get wiped out. Look for a system that takes a lot of little losses while waiting for a big breakout, instead of using a system that makes a lot of little profits, then gets wiped out. The only thing you can control in trading, is how much money you can lose. If someone says you can't lose, run away.

 

[Josh]

Are you familiar with Nassim Taleb's Black Swan theory.

Basically this system will work until it doesn't. You could make steady profit for weeks/months/years with the appearance of low risk however there is immense hidden risk and the system could blow up to a black swan at any time.

You could essentially make a small profit for years and then lose it all in a few seconds.

 

[Stayer]

Thanks for the inputs!

The bot cost me just 35 dollars, so I'm planning to do the following - deposit 1000 and let it make it back. If it makes it back - withdraw the excess and let 1000 sit there making trades. If I lose - it's the money which I didn't have before anyway. The real risk comes down to 1000 which I deposit in the beginning.

 

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[MoneyDoc]

The only people that make money from these "bots" is the bots owner, could even be a fastlaner.

 

[loop101]

Thanks for the inputs!

The bot cost me just 35 dollars, so I'm planning to do the following - deposit 1000 and let it make it back. If it makes it back - withdraw the excess and let 1000 sit there making trades. If I lose - it's the money which I didn't have before anyway. The real risk comes down to 1000 which I deposit in the beginning.

If you take out the first $1035 of profit, you will not lose any money. Profits are made when a trade is closed, and money is made when it is taken out of the game.

 

[Tregan]

Use high caution!

My brother-in-law lost close to $20,000 over the last year using Forex and day trading. He thought he could make a go at it, after all he'd played with a 'pretend' account before opening any real trading accounts and done so so. That was his first mistake, the second was thinking he knew enough about markets and economies to play with the big boys, the bankers/hedge experts/etc.. They slowly drained him and now he's back to looking for a job, along with the $20,000 to pay back.

Unless you are a quant genius that knows the in's and out's of the market, don't do it. Not even with bots.

 

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[Guest3722A]

I guess if you want to go the eventful dream route there's always c2. https://www.collective2.com/trading-system-finder
Its kinda like an odesk but with trade systems. Seeing that this site has been around for years, I kinda wonder how well the owner of the site is doing...

 

[Grimaldo]

Thanks for the inputs!
The bot cost me just 35 dollars, so I'm planning to do the following - deposit 1000 and let it make it back. If it makes it back - withdraw the excess and let 1000 sit there making trades. If I lose - it's the money which I didn't have before anyway. The real risk comes down to 1000 which I deposit in the beginning.

Stayer you are going to lose the money. Before I read TMF I spent ONE YEAR looking for successful robot forex. I am 99.999999999999999999999999999999% sure that you are going to lose money.
Probably you are using a grid system. It will work for a while until it blow your account. It makes very little profits easily achieved because of volatility but it has stop losses based on equity.

Back-test are useless. And never use the system with a bonus from a broker. It has a lot of clauses that won't make you able to withdraw your money.

You can send me more info about the system and I'll tell you what I think.

But man use the logical side of your brain. $35 for a making dollar machine? No sense.

 

[PureA]

If it was that easy why wouldn't everyone do it?

 

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[AubreyJ]

I personally would never use a bot to make investments for me- I want 100% control over my investments, but that is just me.

Also, with investing there is ALWAYS going to be people who made a killing with various investment strategies and methods. I love the market, and I love investing- but the stories of people losing a shit load of money surpass the stories of people making a killing. The problem with things like this is in theory it seems so easy- you put your money into an account, allow a bot to make the trades, and sit back while collecting $50+ a day- but that just isn't the reality of it.

 

[Jonleehacker]

the bot makes lots of trades with small gains in a demo account, but you'll quickly see the difference between a demo account and a live account: spreads and lag.

Those differences will likely be the difference between profit and loss for your robot, even if it's a good one.

Be wary whenever you think you've found easy money, most likely you have... for the person that your money is flowing to.

 

[MJ DeMarco]

the bot makes lots of trades with small gains in a demo account,

If you have an pulse and a heartbeat, your demo account will always make money. It's like the demo account at an online offshore casino, spend 1 hour playing blackjack with "free money" and you'll win 100% of the time. You're like "Wow, this is easy! Let me deposit some real money!".

Again, the real money is not being the fool signing up for this stuff, it's the guy/companies owning the platform.

 

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[socaldude]

The catch is that there is no such thing as easy money. You will make $50 but then lose $100. You lose money by chasing money. Always.

 

[Mark Bucks]

@Stayer - I advise to find a robot that has a very solid money management system. Margin level should be above 1,000 and only allow single trade at a time.
Remember losers always willing to take a loss while winners know exactly how to manage those losing trades and turn them into winners.

P.S: We all know Forex Market is the most largest and liquid market. Why not take advantage of it like banks and large institutions do? Trade the way they do. That's it.

 

[BigBrianC]

So: Create a simple trading algorithm. Makes trades along moving average. Sell to people for relatively low price. Get people hooked, play the stock market while doing nothing! Sell different trading strategies ("Hey, try this patch for headhunting!") For slightly higher price. Referral system, % off each new strategy for x referrals
Cash in. Interesting idea I think

 

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[M&A]

The only people who make money using bots/algorithims are those who:

1. Make them and use them for personal use constantly tweaking them, investing 10s of thousands on infrastructure for their system to work even better. Squeeze as much profit out of the edge before the system stops working. (There is a reddit AMA of a guy who makes 7 figures doing this in equities)

2. Those who make average "robots" and pitch them to morons for 99$

3. Those who create algorithms with a clear exploitable edge and sell the intellectual property to prop firms, hedge funds, investment banks for millions. The average person will never be able to do this, the guys who do this are geniuses, not the guy who used to get an A in math class in high school.

 

[Unknown]

Forex = blackjack = forex = blackjack = ...you get the point.