FAQ
- Frequently Asked Questions
1. What is Forex?
Forex is an abbreviation for “foreign exchange”. It refers to the global financial market which exists for the purpose of exchanging one foreign currency for another. The foreign exchange market determines the relative values of different currencies.
2. What is Forex Trading?
The main purpose of foreign exchange is for international trade and investment, allowing businesses to convert one currency to another currency. It is however also used by individual investors in recent times because of the advent of online forex trading through the internet. How this works is that an individual person can open an account with a retail forex trader which allows online trading, deposit some money, and that deposit allows access to margin lending.
3. What is Margin Lending?
In simple terms, a margin lending account allows the forex trader to have access to more funds than they have on deposit, but only for the purpose of trading. The investor can never withdraw more than he has deposited (plus or minus what he has earned or lost), but he can “borrow” funds in the ratio of for example, 50 times, 100 times, or even 500 times what he has on deposit. Those funds can be used to buy foreign currency and then resell it at a profit (or loss) after a period of time. Any profits can then be withdrawn.
4. How Can I Get Involved In Online Forex Trading?
There are a few simple steps involved. In practical terms, anyone can start practicing forex trading by downloading a demo copy of the most common forex trading platform (Metatrader MT4) and installing it on their computer. Works on any Windows or Linux-based PC (not Mac). This allows you to start trading with virtual currency so that you get an idea of how the software (and the trading process) works.
5. What is Automated Forex Trading?
The most common form of automated trading as practiced by retail forex traders, is using the “Expert Advisor” feature built into the Metatrader MT4 platform. What an expert advisor does is follow a set of pre-programmed instructions to open and close trades on a forex trading account. This feature works in both demo (virtual money) and live (real money) accounts.
6. How do I know if Automated Forex Trading works?
There is no simple answer to this question. Because there are many different expert advisor programs available on the internet, of varying quality and complexity, the answer is, that some automated forex trading programs work, and some don’t. And even the ones that do work need to be regularly updated to stay in tune with current market conditions.
7. How do I find a good Expert Advisor program?
The best way to answer this question is to tell you what NOT to do.
(a) Don’t rely on what you read on forex robot sales websites. They are trying to sell a product and many expert advisor vendors cannot be trusted to tell you the truth. Many vendors just want to make a quick buck by selling you a poor quality expert advisor which doesn’t work.
(b) Don’t believe trading statements posted on vendor websites. It is known in the industry that these statements can be falsified, and regularly are, to make a forex robot appear to be profitable when it is not. This is done by using software to generate bogus trading results which appear to the untrained eye to be genuine.
(c) Don’t believe everything you read on forex review websites unless they have independently tested the forex robot concerned. Many review sites are simply pre-sale websites built for the purpose of referring the site visitor to the vendor’s site. If all the reviews are positive, be suspicious. The best forex review sites publish trading results which demonstrate that some of the expert advisors tested have LOST money.
(d) If possible email the vendor and ask for an Investor Acccess password to a live account which is being traded by the EA you intend to purchase. Even better, some vendors (for example GPS Forex Robot ) publish this Investor Access password on their website. This allows you to enter the account number and the password into Metatrader and see for yourself what trades the EA has made on a live account.
(e) Don’t invest real money until you have demo tested an expert advisor to see if it performs on a virtual money account. If it does not, ask the vendor for a refund. The vendor may try and talk you out of it or offer tips on how to make the make the expert advisor profitable. By all means, work with the vendor, but don’t allow the money-back refund period (typically 60 days) to expire without getting satisfactory results. As a last resort, approach the payment provider (Clickbank and Plimus are the two most common providers) for a refund.
8. Which Expert Advisors Do You Recommend?
There are enough profitable EA’s on the market for you not to have to waste your money on less profitable alternatives. On this site there are 4 places you can go, to find good, profitable expert advisors.
(a) The best robots I have tested or validated by Investor Access password, can be found on the Top 3 Robots page.
(b) On the Prices page you will find a more extensive list of expert advisors, with their Investor Access status (Not Provided, Verified, or the investor access password if it has been approved for publication by the EA vendor)
(c) Go to the “Best Forex Robots” category listed in the sidebar on every page of this site.
(d) To view independent trading statements of most of the expert advisors available today, go to the Trading Stats page. If an EA is not listed there, be wary, as without independent testing, you are literally flying blind when it comes to knowing if an EA works or not. If an EA is listed there, and you are considering purchasing it, do a careful study of how it has performed, especially if it is a live statement. If it has been consistently profitable in live trading, then it is worth at least buying it on 60-day trial. If it has performed well on a demo account, you may get the same results in live trading, but the risk is higher.
(e) Check out Forex EA Lab which is a subscription service that keeps you up to date with which EA’s have been independently tested and rated to be the best forex expert advisors. By Mark Larsen of GPS Forex Robot.
