August 9, 2013
The Recent Failure of Automated Systems
This is a guest post from James McCabe that discusses the recent failure of automated systems. I hope you find it useful.
The advance in automation technologies has changed the way people trade forex, with software replacing several physical functions of a human trader. forex automated systems are loved by most individuals because they enable them to enter trades effortlessly throughout the day, trim down repetitive tasks, and erode emotional trading habits. However, recently, they have failed to deliver as expected.
The foreign exchange market is the largest financial market in the world and is expanding at a fast rate. Currently, it is estimated that it has a daily turnover of over US$4 trillion and this rapid pace of growth means that the conditions for trading are also changing. What worked last month may not work this month. Moreover the market is also becoming increasingly volatile and dynamic. As such, forex automated systems, which use built-in algorithms to analyze data and execute trades once the set conditions are met, are unable to keep up with this pace of development.
It is not easy to understand what forex automated systems are up to. Most trading software never realizes success because from the outset it is not developed to consider the turbulence of the forex waters. Devising a profitable trading strategy needs not only programming skills but also a proven trading system. So why do some individuals put all their hopes in automated systems? One reason for this is that these systems are marketed aggressively and give the buyers false hopes of building a mansion in one week. On the contrary, it’s not easy to find one that really delivers the promised returns, even in one trading session.
The current technology is double-edged; it can work for the benefit of the trader or accelerate his or her downfall. If trading software is not constantly updated it may fail. If there are constant connectivity problems, it may fail. If there is no compatibility between the automated system and the forex trading platform, it may mean no fruits can be harvested from hard days of work. Worse still, if a trader is not technologically-savvy, he or she may make some setup mistakes and subsequently cause massive damage to his or her trading account. Most automated systems are simply not designed to sail through these hurdles.
Since there is such a risk of failure with many automated systems, the most suitable approach to succeed in the forex market is through self-learning and developing your own strategy for navigating the forex waters with a profitable outcome. Just like with any other business, there is no short cut to earning money; you have to work hard and burn the midnight oil. Period.
This post is guest written by James McCabe. He is a leading forex analyst at and has 10 years of experience in the workings of the foreign exchange market. You are welcome to visit his website and learn more about currency trading secrets.