MoneyTec 2.0 - Online Forex Traders & Brokers Social Networking Community » Trading Methodologies » Tools of the Trade

[Kat Magnus]

When looking on the market for a Forex Trading System to make your life easier there are 4 very important identifiers you should measure their suitability by. To help you make an informed decision I've outlined them below.
1. Has the product been backtested?
Most vendors will sell you their Forex robot based on successful backtesting. Backtesting is important as it shows us that the robot can potentially profit on live trading. However, you shouldn't just focus on backtested result and it does not guarantee a successful forward trading.
Why? Because the backtester can ignore market conditions. In live forex trading, you might see the gap in price during a news announcement and market spikes. You may also see the big spread between bid and ask prices of the currency pairs which may affect your trade due to excess slippage.
2. Forward Live Trading
The absolute best proof is live forex trading. Not many robot vendors use live trading to support their claim that their robot is the real thing. By looking at the live trading account, you can see how accurate is the backtested report of that robot.
3. Money Management
No matter how well a Forex robot seems to be live trading or backtesting, we can never know what the future result will be. Hence, we must employ adequate safeguards - sound money management rules. This is the KEY to successful LONG TERM wealth building via Forex trading.
4. Low Drawdown
Drawdown represents the total percentage loss experienced by a forex strategy before it starts winning again... and drives the investment balance back up.
Taking drawdown into consideration, you can judge just how risky these automated strategies are. You will see some out there that have a 40% or even higher drawdown in their reports. With those kinds of odds, you better have one heck of a forex ,strategy to back up that high of a risk level.
A good robot should be below 15% drawdown, which means you have an expert advisor backed by a rock solid strategy that would take an absolute miracle to bankrupt an account.
There is much hidden automated profit potential in the forex trading system. And I've gone a step further reviewing the best precise automated consistent forex trading system on the market today which follow the above criteria. Check out my site for more information and details. http://www.ksreview.com