Forex robot scams encompass Expert Advisors (also famously known as EAs) and other automated trading systems.
What is a Forex Robot?
A “robot” in the forex world is a program that only uses technical indications to enter trades and allows the human to sleep in a hammock on a beach while he “makes” money
The forex robot operates continually with the press of a button, making trades based on mathematical formulas applied to prior price history.
In other words, whether or not the user is in front of the computer, they run automated mechanical processes.
The issue is that forex robots and their pre-programmed thinking do not account for constantly shifting market conditions.
Market behavior is dynamic, always shifting between three possible directions: up, down, or sideways.
Most trading robots are not programmed to operate in all conditions or to detect changes in the trading environment. As a result, losses occur, and they can be significant if not constantly monitored and managed.
The scam here is not the forex robot itself, but rather how it is presented. Scammers will frequently try to offer these trading robots and automated methods as the “holy grail” of trading, assuring you’ll retire next week.
They also offer them at “human affordable” prices ranging from $20 to $5,000.
OMG!! Only $20?? For the chance to make absurd amounts of money? That sounds like a good deal!
Stop right there. Listen and collaborate.
Why would the developer try to sell the system and split the profits if he or she is making a lot of money with it???
And why is it only $20? With $20, you can barely get a good meal for yourself and your sweetums at Chick-fil-A!
The only real profit for these con artists comes from the selling of their forex “R2-D2s.”
The con artist will attempt to seduce you with historical data and back-testing records.
It’s been tried and true!! It has to work!!! It’s also only $20! That’s less than a PlayStation 4 game!
Stop right there. Listen and collaborate. Again.
Sure, it appears to be very profitable. However, there is no such thing as a constant market in the currency market. Conditions are always shifting. In a changing market, the past has little bearing on the future.
We can’t be sure that what happened in the past will happen again in the future. There are really too many variables to take into account.
Plus, you don’t know if these con artists are making up the results. They could just enter random numbers into an Excel file because most people won’t bother checking to see whether they are correct.
What is our advice?
Avoid automated systems and robots until you have mastered both trading and programming.
Beginners have no knowledge of trading or how forex markets work, therefore they will not grasp how the robot works, what environments it is most suited for, or how to alter and adjust the system.
It is better to learn how to trade consistently before deciding to allow a program do it for you
Consider this: Would you entrust your hard-earned money to a complete stranger (with no brain to boot!) to invest without knowing what he or she was doing?