Ever since the inception of retail internet fx trading, and particularly since the emergence of automated trading, there have been scammers in the world of forex trading. And over the years, it’s become easier to recognise these fools, because of the assistance of experienced traders from forex forums, review sites and blogs. It could be argued that today’s new traders are much more equipped to understand who’s a scammer and who’s not, compared to new traders 3/4 years ago. Having said that, there are many more scammers today than there were a few years ago, so even though today we have decent “indicators” to help new traders recognise them (pardon the pun), the sheer quantity of nonsense out there can make a person’s head spin.
Since most new traders are overwhelmed with the amount of time and effort it will take to become a professional trader, naturally they look for a quick way to overcome the hard work required. So they spend hundreds upon hundreds of dollars on testing rubbish robots, spend hours upon hours backtesting, live testing, and consequently end up losing a large chunk (if not all) of their balance. But then they come across yet another potential dream EA, and so the cycle continues…
So, how does one combat such scamming imbeciles? Well, here’s a tip that will eliminate 90% of the head-spinning:
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Know this – there are no EAs out there that work, (at least to the best of my knowledge). Take a look on eBay, and you’ll see loads of different EAs for sale, all promising the sky, blah blah. Think about it, do you REALLY think a person would sell his multi-million dollar producing EA for just $49.99? If you do, then either you need to change your mentality, else Forex isn’t for you. Now, I’m not saying that a profitable EA doesn’t exist, nor am I saying that every single seller of EAs is a scammer – it is possible that a person sincerely believes his EA does work, and he’s prepared to sell it for a high price. Having said that, I’ve yet to come across such a robot. And even if such a robot exists, believe me it will not produce the gains most of these scammers are claiming, nor will it be profitable every month.
Recently, a new breed of Forex scammers have emerged, where they’ve been providing “forward-tested proof” of their results, because they realised that their smooth $100.00 to $1mil backtested equity curve isn’t really having the desired effect that it used to. Ok, so if they provide forward-tested proof, isn’t that enough? Well no, because firstly, most of them are only doing it in demo (and demo IS different to live), and secondly, those that are doing it in live, what they tend to do is, test it for a few months on different accounts, often with different settings, (usually with a tiny deposit) and then pick the best month. This is an extremely deceptive way of enticing the new trader, so be very very careful.
At the end of the day, listen to the experienced traders. Not a single one of them affirms the notion that you can simply slap on an EA in Metatrader unattended and let the bank balance head north.
Bear that in mind…