Forex robots: is it marketing hype or a scam artist at work?

If you trade in any financial market you already know that there are dozens of people, and a dozen for each of those, emailing you trying to get you to try the latest and greatest product. You've seen them, and hopefully you only payed enough attention to them to hit the delete button. However, despite the amounts of spam we are receiving, millions of people fall victim to these email advertisements every year, and the losses are staggering.

Foreign exchange trading has grown enormously in popularity over the past decade. Flexibility is often cited as a contributing factor, but the advent of the Internet, advances in telecommunications and data management software, and the growth in home computing have all had a part in this industry’s success story. However, where there is popularity and money, the criminal element will surely follow, always attempting to capitalize on various fraud schemes designed to deceive. Online forex trading has attracted its share of swindlers and salesmen who prefer to use unscrupulous business practices.

According to Michael Dunn of the U.S. Commodity Futures Trading Commission, “The market has long been plagued by swindlers preying on the gullible. The average individual foreign-exchange-trading victim loses about $15,000, according to CFTC records.” The industry has responded and done a great deal in the past few years to police the broker community, educate traders, and communicate awareness of potential fraud situations to the public a large.

Despite several industry efforts at mitigating obvious risk areas, the primary fraud mitigation participant in the equation remains the individual investor. As long as the nature of human beings tends toward greed at the expense of caution or believes that there truly is a shortcut to accumulating wealth, crooks will make a living off these shortcomings. Nowhere is the individual more susceptible than when plied by the promises made in marketing emails, especially in the area of forex robot software.

Many forex novices find themselves in over their heads due to inexperience and impatience. Numerous ads tout outstanding robot results to the uninitiated. Obviously having a “black box” robot to do the trading for you is a hassle free way to make millions, but these unrealistic expectations are the basis for numerous marketing scams.

There are many good trading robots available in the market, but unfortunately, many poor ones and some outright scams out there. The scams utilize an old format, the “complex instrument” sale swindle. In this con, the victim is offered something so complex that he must trust the swindler’s version of what it is or can do. With automated forex robots, the complexity requirement is present and usually accompanied with slick marketing claims as to its incredible performance.

Swindlers are also well skilled in cyberspace sales techniques. Your first warning sign is to be skeptical of any unsolicited offers, whether email spam or various website ad referrals. You are your first and last line of defense.

Tips on what to avoid are straightforward common sense:

• No Detailed Description: If marketing pitches are filled with promises and nothing else, then be skeptical. Scams rarely give details on how the software operates or makes decisions. You need to understand the algorithms in order to know their limitations:
• Outrageous Promises: As with anything else, if it sounds too good to be true, it most likely is;
• Test Results look Suspicious: If you cannot verify the results or they look as if they were fabricated by cutting and pasting, go no further;
• No Testing Allowed: You must be able to test the software on free demo systems in order to see how it works. If it continually loses, then return it for a refund.

Automated robots can be a fun way to trade foreign currencies if you can avoid the various marketing scams that seek your dollar. If robots are beyond your liking, there is always “mirror trading” to investigate. Outsource your decision making to the experts, and see if your results are any better. Check reviews first, and remember, no shortcuts!