When it comes to Forex auto trade systems, you will easily find a number of products in the market. This is expected because with the advent of computer technology and the Internet, a number of Forex traders themselves have decided to come up with such applications and systems to make trading easier. This means traders no longer have to stay attuned to their computers 24/7 just to monitor activities in the trade. However, this does not mean that having the software alone is enough to guarantee consistent profits. In fact, there are traders who lose lots of money, and the common reason behind this pertains to curve fitting.

What exactly is curve fitting then? This is actually refers to the simulation of certain track records over data collected in the past. The rules of the system are then curved or bent so that the system would fit the data at hand and then profits would be shown. This simulation is then presented to the trader using the application, and the system would then move forward with the trade. However, such would not be the case with real time Forex trading because you simply cannot curve fit since you do not know the prices ahead of time. Moreover, similar data sequences do not really replicate themselves in the exact same form so the system would literally collapse over time.

Unfortunately, there are a lot of Forex automatic trading systems and applications that make use of curve fitting, just to lure traders into their scams. Curve fitting is fairly all right when you are using demo accounts and you do not have to worry about losing real money. But when you enter the real world of Forex trading, this can only bring you worries.

Thus, you have to be careful when choosing which application to use when trading Forex. Curve fitting is actually not hard to spot at all. Here are a few of the things you should look out for to spot software that merely uses curve fitting.

Look for what is known as the CFTC disclaimer, which states “simulated results do not represent actual trading”. This is obviously an indication that the software is just capable of conducting simulations and not the real thing. You should then steer clear of this application. Aside from that, you should also be wary of software that has different rules for different currency pairs and trading conditions. When exit points become subjective in nature, this is also a clear-cut indication.

These are just some of the signs that you should watch out for when choosing Forex auto trade platforms or systems.

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