t is most likely that if you have already started your journey in automated trading you have already bought a commercial automated trading system and - most likely - you have already found out that the system is either a complete disappointment or it fails to deliver what was promised on the trading system's website. What went wrong? Why do most - if not all - commercial trading systems fail to deliver? How can you find systems that do deliver what they promise? On today's article I want to talk a little bit about commercial automated trading systems and the skills and criteria you need to have in order to choose systems that do have enough evidence to backup their claims and do have a high like hood of showing you profitable results once you buy them.
First of all, I want to contradict most expert advisor sellers here and tell you a very simple fact. This is your fault. The fact that you lost money and you bought something that doesn't work is only your fault. You - without anyone pointing a gun to your head - went into the expert's website and bought the software believing whatever promises you were made. It is most likely that you disregarded the reliability of the evidence shown or you just wanted to have a quick fix to get you out of your financial problems but the truth is that you did something wrong which ended at a financial loss to you and some profit to an automated trading system seller. So the question is, how can you avoid this in the future?
The first thing is to just be very careful with the systems you buy and look beyond all the marketing hype they put around you. You need to really know what evidence they need to prove reliability and what evidence they are showing you. Also you need to be absolutely certain that all the evidence shown is real so you simply will need to avoid any system that does not have live investor-access verified trading accounts. Most expert advisor sellers are a clearly unethical kind so you will need to make them prove absolutely everything they say. Pictures of statements are not OK and statements that are not live-updated and investor-access verified are also not worth looking at. Having the investor-access to a trading account lets you verify that the track record is real and that the account is indeed being run with real money, so this is a must. If they have nothing to fear, then they will have nothing to hide.
Another extremely important aspect is the statistical significance of the results and the simulations. In order for a system to have a high like hood of being profitable in the long term (the next 10-20 years) you need to know that the system can adapt to changes in market behavior and that the live results are not simply the outcome of some temporary profit cycle. In order to know this you need to have 10 year back testing results and a back test of the same period of the live test -which should be at least 6 months long - in order to confirm the validity of the back testing results. If you see coherence between live and back testing, then the system has valid simulations meaning that you can trust the 10 year back testing results.
To sum it up, if you want to avoid being ripped off and you want to get only systems which have a high like hood of being long term profitable then you simply need to see a 6 month live test with verified investor-access, a 10 year back testing statement and a back test of the same period of trading as the live test showing if the results are consistent. Any system that fulfills this criteria has a very high like hood of reaching long term profitability. As you see, the evidence is not overly difficult to get and any honest Expert Advisor seller who really has a system that will make you an income in the long term will show you all the above. However, up until now I haven't been able to find a single commercial trading system showing this. Could you have any idea why?
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