There are few certainties in life and even fewer in the world of forex trading. But one thing that is etched in stone when comes to evaluating forex robots is that you need to have the courage to test your forex robot out in a live account with real money.

By now you’ve probably been to more than one forex robot sales where the developers boast about the performance of their forex robots, but scroll down a little further and read the fine print. You’ll be in a for a surprise because you’re going to discover that those forex robots with 80%, 90% and higher success rates are achieving those results either on demo accounts or through back-tests.

That’s all well and fine, but the fact of the matter is no trader can figure what works and what doesn’t work with his forex robot unless he’s using it in a live account. Simulated accounts are good for novice traders and back-tests do nothing more than you how a forex robot performed in the past, not how it will perform going forward. Let’s look at some more of the pitfalls of not testing a forex robot with live capital.

More Pitfalls Than Advantages

You can run a forex robot on a demo account and literally wind up ecstatic with the results. You might that your forex robot really is turning out winners at an almost unbelievable pace. But look deeper into those results. Is your forex robot trading in a way that you would never want it to with your real money? Is your forex robot staying in trades too long? Is it over-trading or taking big losses? Is the forex robot trading too many pairs or not enough? All of these are pitfalls that a forex robot can succumb to in a demo that may skew its results, leaving you disappointed in the end.

Your best option is to risk a few hundred dollars and sign up for a mini or micro forex account. There you can debut your forex robot and learn its strengths and weaknesses while keeping your risk profile relatively low. This is the most effective way of figuring out what you need to alter with regards to your forex robot’s settings. While this may cost you a few bucks upfront, this strategy can keep you away from big losses down the road.

Real Money. Period.

Simply put, there’s only way to fly when it comes to exploring the effectiveness of your forex robot and that is with real money. We don’t mean to say that demo trading and back-tests are deceiving or even misleading, but they just don’t give traders the real feel of how a forex robot is going to react under live market conditions. This should be obvious because when you trade in a demo account, while you may be getting live quotes, there’s no one trading with you and the same goes for your forex robot. Put your forex robot in a live account.

Author Bio: Brenda Maison is a retired Canadian Economist. My main activity since Winter 2006 is trading Forex. I’ve been trading currencies online with the help of EA’s (BTW, the best source for EAs is Forex Robots ) and I currently manage trading accounts at two Forex brokers in the US and in UK respectively.

Category: Finances
Keywords: Forex Robots, Day Trading, Forex, Forex Brokers, Finacial Advisors, Expert Advisors