Introduction . . .

FX-Auto has received a lot of criticism. Some of it I can agree with, but for the most part, I feel that the users are blindly choosing the "best" systems and not taking proper money management into consideration. The largest fault with FX-Auto is their inability to display intra-trade draw-down. More simply put, the "max draw-down" statistic that they show for each system is incomplete because it only represents the drawdown that a trade represented at the close of the trade. For example, lets assume a system purchases EUR/USD at 1.4735 and the pair declines to 1.4355, but the system never closes the trade and the EUR/USD eventually comes back to the 1.4700 figure. The system closes now for a 35 pip loss and this is now displayed as the maximum draw-down. In actuality, the pair traded down to 1.4355 which would represent a 380 pip draw-down. For smaller accounts, this could be enough to whipe someone out completly.

But most of the criticism to FX-Auto comes from traders complaining that systems perform well during a short period of time and then fail to replicate these results in the future. Of course, the past results represented by FX-Auto are actual, live traded results and are not manipulated. Unfortunately, traders come to FX-Auto with moneybag pupils and instantly pick the most profitable systems for the past week or month. They usually tend to have no regard for proper money management, fail to evaluate the actual riskiness of each system and then wonder why they experience terrible losses. To make matters worse, most of these traders will throw in the towel on their newly found systems and jump to the next rising star after a week or two only to experience the same morbid cycle. I refer to this as unfortunate because it is possible that some of these systems are indeed profitable, but will experience draw-downs much like any system. The key is to remain patient and allow for a performance curve to develop over time.

My goal with this journal is to attempt to (if only slightly) put the debate of whether FX-Auto can actually be a lucrative venture or if it is simply a losing gamble to rest. I have also been quite disappointed with the amount of information and personal experiences with regards to this topic. Searching the web and Elite Trader only turned up a handful of first-hand accounts and I hope to contribute information to others who are curious about FX-Auto and the systems they offer.

If interested, feel free to catch up on my intentions through the thread I started on Elite Trader.