Forex Signals: Why a Human Being Is Able to Send Better Signals Than Automated Forex Signal Software

Posted by on Apr 29th, 2011 | no comments home title

I have been testing various forex signals for a long time and I’ve learned something very important that I want to pass on to you:

The performance of automated forex signal software doesn’t even come close to the performance of a truly gifted forex trader.

This is one case where a human can consistently outperform a computer by a long shot.

Even the best forex software cannot out-perform the best forex trader.

The best forex software may be able to outperform an average forex trader on most days. However, when a news event hits and sends the foreign exchange on a wild rollercoaster ride, no software is going to be able to produce profitable signals throughout the event. This is because there is no way to program into the algorithms of the software exactly how it should react to these unexpected news events.

Even on a dull news day, there are little shifts in the market and over the course of a week or two these little shifts add up to bigger overall swings. Again, automated software can not be programmed to handle these little shifts let alone the swings over a slightly longer period of time. This is why a truly gifted forex trader can always outperform automated software by a long shot. It is also why software becomes outdated almost the moment you download the latest patch.

Truly gifted forex traders are good at thinking on their feet. Yes, they have overall strategies in mind but they make constant little adjustments in response to those little shifts in the market. Over the course of a few weeks, they often substantially change their overall strategy to better match the way the market has swung.

Forex software is usually developed as a collaboration between a talented programmer(s) and a talented forex trader. The trader explains his strategy to the programmer and the programmer converts this strategy into a series of “logic” steps called algorithms. This is then back-tested on old trades to make sure it is functioning properly.

However, a problem always arises with the software because the market is shifting and drifting over time and a strategy that may have been really profitable 3 weeks ago may no longer even break even. This is exactly why the better software always includes automated updates (“patches”). They try to keep up with the changing market but in reality they are always at least one step behind. It takes a real human being to who is acutely tuned into how the market is changing to realize a really nice profit.

If you really want forex signals that are going to make you a lot of money, you need to get them from a real human being – but of course this human being needs to be one of those forex geniuses whose intuition seems to carry them through every unexpected news event and any and all shifts in the market – both large and small.

Frankly, it is quite rare to find a truly gifted forex trader who is willing to send out forex signals in REAL TIME, i.e. quick enough that you can copy them exactly and make the same profit they make. However, there are a few subscription services that offer this type of service. I strongly recommend you test these out – always in a demo account first to make sure they are really profitable and also to make sure you have everything worked out perfectly on your end – you wouldn’t want to get a set of really profitable signals and then not trade it properly. Once you have built up confidence that the signals you are being sent are profitable and you have everything set up perfectly, you can start using real money and watch the profits roll in.