Automated Trading

Most “human” traders, whether they are amateurs or professionals, run the risk of rising emotions. For some investors its ego, greed or wishful thinking that undermines effectiveness. For others its denial, fear or panic that shakes confidence. When it comes to investing in complex futures markets, human emotion can cause investors to be inconsistent and undisciplined. The commonly held belief that 9 out of 10 futures traders lose money can be partially explained as a consequence of human emotion.

System Discipline

Futures Trading Systems are the “machine” antidote to human emotionality. A computer-based trading system generates instructions based solely on programmed rules. These system rules determine timing for market entry and exit, profit targets, and protective stops to limit losses. A system’s binary code is emotionless. The system does not believe, feel, worry or obsess over a trade. It simply transacts unemotionally. System execution is objective, disciplined, quantitative and scientific.

The Flip Side

While the benefits of automated trading are numerous and make sense logically, there are also downsides to completely relying upon automated systems. Mainly, the Forex market reacts instantly and sometimes violently to news releases and other economic indicators as soon as they are released to the public. Automated systems cannot factor in the results of unexpected announcements. Human manipulation and monitoring of automated systems is paramount to its continued success.

Fisk Financial FX utilizes automated platforms built through painstaking verification and computation. Despite our belief in these systems, no trades are executed without human oversight.

Purchasing a “Robot”

Remember that Forex automated trading programs (or “Robots”) are available in chat forums, websites, and even on eBay. Many of them claim outlandish returns, attempting to prey upon the viewer’s greed and desire for the “magic system”. The bottom line is that making a living from trading is not easy nor can it be purchased in the form of a software package. Yes, our managed Forex investment program utilizes automated trading systems, but these systems are updated and retooled often to reflect the changing market dynamics.

Make sure that the performance data you are reviewing prior to your purchase is forward looking and not based on “back-tested” results. Back-testing is done by using historical price data. When using historical data, programmers can skew the program to take advantage of the data they can already see! While traders can become familiar with strategies by viewing their projected performance, any projection of profits cannot be guaranteed.

Make sure that testing is “live”. That is the only way a system can truly be tested.

The often misleading information provided by the programmers for these Robots is why our clients using us as Introducing Brokers are entitled to have us review their Robots as part of our service.