BEST FOREX ROBOT - Success at Auto-Trading

FOREX ROBOT

Introduction

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The Right Mindset

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Forex Robot Statistics - Part 1

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Forex Robot Statistics - Part 2

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Forex Robot Robustness

- What is a Forex Robot?

- Why use a Forex Robot?

- Key factor to look for in a   Forex robot

- Testing for Robustness

- Live VS Demo Testing

- What to look for in Broker

- Conclusion

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Forex Robot Drawdown Analysis - Part 1

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Forex Robot Drawdown Analysis - Part 2

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Drawdown Recovery

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The Emotions of Forex Robot Trading

Forex Robot Drawdown Analysis - Part 1

Think about this for a minute. If you've got a robot that makes money but risks every cent in your account on each trade, you can end up in a rough situation. Most professional traders risk around 1% on each trade that they take! With this in mind, one of the most important risk factors to consider is called the drawdown. Drawdown is the percentage than an EA loses from its last high point to its next low point. This can give you an idea of the potential drops in value that you might experience with that EA.

A good way to start is to get a chart or graph of the equity curve. Most EA sellers put the graph right on their website. An equity chart will show you how much money an EA won or lost in a certain period of time. For instance it might show you how a robot performed over the last year. On the bottom axis it will show you the time, and on the vertical axis it'll show the amount of money. You always want to look for an equity curve that slopes upwards, as this shows that the robot is profitable. If the graph looks really choppy and is up and down all the time, you can expect that it's a very volatile robot. This volatile robot will most likely have some steep drops, also known as drawdowns. However if the graph is more of a smooth curve, then you can expect smaller drawdowns. A smoother curve will be a less volatile robot.

So the first step when doing your drawdown analysis is just to take a look at the charts. This quick visual assessment will give you some great insight as to what to expect with your robot. Once you've taken a look at the equity curve charts you can start to get into the numbers. There are three parts to a drawdown analysis; the max drawdown, average drawdown, and the drawdown recovery. It's very important that you look at all three of these statistics.

Let's start off with the max drawdown. As we said before the drawdown is the percentage that the robot loses from its high point to the next low point. The max drawdown is simply the maximum drop that has occurred in the past with that particular robot. It gives you a good idea of a worst-case scenario. For instance if an EA had a 50% drawdown that means at one point the robot lost 50% of the account value. That's a pretty steep drop. In a worst case scenario you'd lose 50% of the value of your account.

A good way to think about max drawdown is to imagine incurring that drawdown right when you first started trading. Imagine opening a $10,000 Forex account and taking a 50% drawdown immediately. You're left with $5,000. If you don't think you can handle such a big drop right in the beginning, then it may be a good idea to keep looking for the Best Forex Robot. There are 2 other types of drawdown that need to analyzed, and we'll discuss this in the next few sections.

Forex Robot Robustness - Conclusion Forex Robot Drawdown Analysis - Part 2