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Forex Expert Advisors - Which Ones Truly Work? By Timothy Rohrer
There are a lot of Forex expert advisors on the internet these days, in fact hundreds of them. It almost makes it not possible to get the expert advisors that really work. With so many choices and so many different Forex robots trading on multiple currency pairs there has to be a solution to identifying the right expert advisor.
The primary thing one must ask themselves when searching for a quality Forex expert advisor is, what type of past performance does the trading robot have? What type of trading precision are we dealing and which currency pairs does the expert advisor trade on?
The largest mistake that most expert advisors make is trying to provide a solution or mathematical formula that works for all currency pairs. It is simply impossible to have a Forex robot be an expert on each currency pair due to the fact that each pair has it's own patterns and daily ranges. For that reason when identifying an expert advisor one of the first things we look for is an expert advisor that focuses on just one currency. Secondly we examine its past performance over the previous five years. If the expert advisor has performed well with minimal draw down and has continued profitable months, than we are half way there.
Then, we examine the expert advisor’s money management. We have to ask ourselves, what was the maximum drawdown over the previous five years? Anything with less than 30% draw down over the past five years is a definite positive. One more question we might ask ourselves is, does the trading robot use a stop loss? Some trading robots will not use a stop loss and believe it or not can be extremely profitable. A system that does not use a stop loss has to have a trading accuracy of 80% or higher where the winners clearly out weight the losers by more than half in terms of dollars.
Lastly, decide how much risk you are willing to take. Trading with an expert advisor or any system at that matter does require a bit of risk, yet if handled properly can be extremely profitable. Never use an expert advisor without first testing it in a demo trading account. Only after the expert advisor is able to sustain profits after about three months should one consider using the trading robot in a live account. Be sure to find an advisor that has a very high success rate, uses correct money management and has been thoroughly back tested and you will be sure to find yourself a winner.
Forex expert advisors can be very profitable when you have the right one.
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