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Discretionary Trading Or Robots


A simple search on the internet for “Make money trading Forex” will bring many results (actually 2,210,000 when I checked to be precise).  How many of these are of any value?  There are so many sites claiming to have systems which will give you huge returns with no effort. 

This of course is not the reality of trading.

How do you know these systems are not the real deal?

If you could consistently bring triple zero returns, as many claim then they can, there would be no need for the creators to sell these products!   People want to hear this kind of sales information though and will, no doubt, continue to buy the robot trading programmes that are being sold by these sites.  Any real trader will tell you that a Forex robot will not make you money in the long term.  This software will not adapt, without human intervention, to changing market conditions including all of the ranging/trending periods we have to come to grips with as discretionary traders.

Why does robot trading software not work?

Volatility does not stay the same for ever.  A trading robot will not adapt easily to changing market conditions – this is the reality.  A technical trader can still look for the same patterns which show “fear and greed” in the human market participants regardless of the volatility.  I do not doubt some traders use software to trigger their trades but a set and forget Robot trader?  I think not.  Look back over your charts at the price spikes (many robot systems stop losses hit) and ranging periods (trending robot systems killer) and ask yourself if a system can survive all of these conditions.

How do I make money trading Forex then?

A doctor, lawyer, corporate CEO etc does not buy a piece of software and sit back and reap the benefits.  There is a path to success in these professions and trading is no different.  Trading can be extremely lucrative but it takes a lot of hard work.  A trader needs to find a trading style that suits their personality – this can take time.  As traders we need to leave a lot of the values behind that have served us well in life.  When we are in a losing trade and it is in our best interests to close the position, and take a small loss, the traditional education can cloud our judgement.  “Stick with it and try harder”… “don’t quit!”  This kind of mindset is not conducive to long term profitability. 

With time and education we can overcome these issues though. 

Here are some of the common sense approaches that can help:

  • Familiarise yourself with simple and robust technical analysis trading techniques.
  • Place a firm emphasis on money management and trading psychology.
  • Be an independent thinker.

With time, success can be found in the financial markets.  The next time you read about a "1000% return” trading robot and feel tempted to invest.  Think very carefully about why they want to sell you this “Golden Goose”.

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