Forex Robot

In the last two to 3 years, Forex robots have swept the retail Forex marketplace. Everyday a brand new Forex robot is being set in motion by someone. Nearly all these programmers are making large claims about the money earning poweress of their robots. Online sites of these Forex robots, you will come across claims such as 97% precision on back testing. So what’s a back test? With the advancement in software engineering, it is now feasible to test any system with the previous information or what you call historic data. So a back studying is done using historic data or anything happened in the previous markets. 

Now, performing a rear evaluation is not difficult with the Meta Trader 4 or what you call the MT4. Simply download the historic information of the currency pair for the time which you are intrigued in conducting the back test. What’s much more essential for you is to comprehend the shocking limitations of back testing. Now, using historical data may help you rapidly test a robot. This test is merely a symptom of the chance of the robot doing well in trading. At any time you do back testing, you just ignore the slippage that’s ever present under live marketplace conditions as well as the widening of spreads which happens when their is low liquidity on the market. 

The historic data only ignores both extremely important facts of trading. The spread is always the same from the rear test and slippage is just ignored. This means that a back test is no evidence of the operation of a robot. The only real evidence of a Forex robot is its reside operation. You’ll never know how a robot will perform under reside industry conditions with a back test. Always a dangerous proposition for a brand new and untested Forex robot. Second of all whatever happened in the past might never repeat in the future. So testing utilizing the previous information will never tell you anything about the operation of a Forex robot.