Why Most Automated Systems Never Work

These days, there is a lot of hype surrounding automated trading systems. If you are a regular subscriber to any Forex website, you have probably seen ads or received emails promoting trading systems. Every company claims to have the best trading system and to be able to make massive returns. Of course, we all know that most of these systems are not even close to what they are made out to be. A majority of you have probably tried one or more systems and seen them fail. Of course, when you spend two thousand dollars on a system to do your trading for you, you expect it to work and when it doesn’t, it is quite a disappointment. However, we shouldn’t really be surprised that these systems don’t work.

 

First of all, it is sad to say that many people in the business of selling these systems do not really care about the success of their customers. They know that if they make the system sound profitable and look cool that people will buy; and once they buy, what do they care if the system doesn’t work at all?

 

Even if a company is honest and does care about their customers’ success, there is still several things that can make a system fail. One common reason why even honest companies fail is a lack of testing. For instance, a company may develop a trading robot and test it on a master account and have very high profits for three or four months. They see the results and are so excited that they just can’t wait to get it out there so they immediately put it on the market for sale. The main reason this is not good for you, the customer, is because the testing was EXTREMELY narrow. A robot trading on one account, with one broker, and at the times that one trader happens to have it running does not give you a complete picture of whether or not this robot can be successful in the long run (NOT EVEN CLOSE!).

 

Another way that companies go wrong is when they release trading software that is completely built around the current market conditions. Many times a company will discover a strategy that is raking in the cash and turn it into a automated trading system, do some quick testing and ship it out. When a customer buys the system, it may work for them for a while, but as soon as the market conditions change, the robot is useless. This is where you need optimization. A good trading system should be based on a proven strategy that has worked for many years and then is only slightly modified as the market conditions change.

 

With everything that I have talked about in this article in mind, we at Winner’s Edge Trading thought that we could build an automated system that actually works, and that people would consider a real investment when they saw that it truly made them money in the Forex market. Considering all of the things that these companies do wrong, we wanted to make sure we did a few things right:

 

1. Not claim that our system wins every trade and can turn a thousand dollars into a million dollars in a month…… We understand that trading is not gambling. The way to truly succeed in Forex is to have larger winners than losers and win a solid percentage of your trades, and that is what we designed our system to do.

 

2. Test like crazy! ….. We understand that most systems fail because they have not been tested in enough scenarios. Because of this, after we developed our system, we gave it to about 200 real traders, just like you, to do extensive testing. They all traded it their own way with whatever broker they chose, and gave us feedback constantly. With their feedback and testing results we optimized and critiqued the system until it reached its full potential.

 

3. Base it on a proven strategy that has worked for years…. We based our system on Casey Stubbs’ personal strategy that has been successful for a long time and works in any market condition.

 

4. Make it optimizable  … We created our system so that we could tweak the settings to make it more profitable when the market condition changes.

With some of those key components, the help of our 200 traders, and hundreds of hours developing and optimizing, Winner’s Edge Trading came up with the Forex Catapult. The Catapult is, in fact, a trading robot; but unlike most of these other systems out there it has been properly built, tested and optimized to be successful both now and in the future. It is not supposed to win a 100% of its trades or double the account size every week, but it continues to pull in profits week after week with solid strategy and money management just like a great trader does. This is why I believe that the Forex Catapult is the best system around.

 

Thanks for reading,

Nathan

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NathanTucci

Nathan Tucci has been with Winner's Edge since 2011 as a writer and trader. He specializes in strategy development and enhancement and loves to share what he learns from testing, research and real world experience.
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  • http://www.winnersedgetrading.com caseystubbs

     Peter,

    5% per day is in my opinion way optimistice if you could do 5% per day your account would be over a million within the year, while it is possible I would recommend more safer target such as .05% per day and you will still be doing very well.

  • Peter Shepherd

    This looks like a great system.  How can I have access to it? What is the price?  I am a beginning trader, with large goals. I have a limited amount of money to start with, and wish to add 5% daily to my balance, using a U. S. based broker with 50:1 leverage.  Is this doable, or would you recommend something else?

  • http://twitter.com/Bruce_Storm Bruce Embrey

    EAs can be a valuable tool but should not be used in place of actually learning to trade and know your strategy. I have used a strategy called Asia Mirror for over 2 years and now use the Asia Mirror EA to trade that strategy. I fully understand that strategy such as the idea behind it, how it sets up, how the positions are structured and how the exits configured. It is based on price-action, trend, fib levels. It is not always a winner and sometimes it crashes and burns but overall for the long-term it is a very solid and profitable system. As you trade it, you will develop a sense of how these currency pairs behave and sometimes you will not trade it even though the setups are valid. Using FXBOOK to track yuor strategy gives you an ability to see how it performs with various currencies and what days of the week appear to be more suited to it.

  • http://twitter.com/Bruce_Storm Bruce Embrey

    Eas are notorious for over-promising and under-delivering. Given the right amount of historical data and manipulating that data through optimization you can make any EA appear to be a winning strategy. One shortcoming in the Catapult testing was that the 4H candle closes at different times depending on which timezone the MarketWatch is based in. If the strategy had been based on 1H or less timeframes the broker timezone differential would not have mattered. 

  • Irwin Godin

    While Im not really interested in using a robot, I adhere to price action trading and earn a good full-time livinmg with it.  The real purpose of this note is to defend the integrity of Casey.  While I dont know him personally I have appreciated his efforts to help people, all the way back to when he was a regular contribuitor to Baby Pips  He appears to be a decent guy with no ulterior motives  There are some good honest people in this world.  Thats all.

  • http://www.winnersedgetrading.com caseystubbs

     Pipstealer,

    Thanks for commenting, I dont think my EA is the best I dont think I said that at all…..

    I am just saying that I am different than many other EA promoters, I trade my live accounts with the software that I created. I also am on this site and on twitter day in and day out working and helping and trading each and every day. So I have built some credibility that others do not have because all they do is post falsified statements.

    I do appreciate the comment and feedback it means a great deal to me. but I must have done a very poor job if you think I am like every EA site around????

    Oh my!  I must have failed my mission!!!!! I am here to help traders and not scam them. If you think I am just like them it is bad on me!

    I am going to evaluate my business because I don’t want my name even mentioned beside those other forex Sharks.

    If I come across like that please forgive me.

    Thanks

    CAsey

  • http://www.winnersedgetrading.com caseystubbs

     Thanks for the response edward, I agree, we must be aware of the scam artists most forex newbies will fall prey to them Dont be one of them.

  • http://twitter.com/Pipstealer_ Pipstealer

    Sounds biased to me, of course you think its the best since you guys made it. jsut like every other EA site around