I’ve just completed a guide to forex trading robots to accompany What Really Profits and it’s taken me a lot longer than I ever anticipated.

I’ve never really collated all my thoughts and research into bots in one place. It was an interesting exercise, but one with unsurprising results. Some of the forex bot vendors should hang their heads in shame. It’s one thing to produce something in good faith that fails after a while. It’s another to make wildly unsubstantiated claims based on theoretical result when the vendor themselves would never dream of putting their own money on the robot.

The internet is a wonderful thing though and there are a number of website cropping up to help you sort the wheat from the chaff before you take the plunge.

Websites that review forex bots

I find these review sites particularly useful because I’ve got such a low opinion of bots in general that I quite frankly don’t want to waste my time on something that won’t even get out of the starting blocks.

I thought Market Maven readers would find it useful if I listed the bot testing sites that I have referred to as a second opinion for my own research.

It’s worth making a few points about how to best use free review sites, blogs and forums.

Firstly with blogs and forums you can get wildly emotional statements from people who can’t see beyond a day’s worth of results.

Comments like “woweee, this is the best thing since sliced bread, my first two trades won” are pretty meaningless because it is just two trades. At the same time comments such as “the first trade lost so I asked for a refund” are all too common.

So when reading other people’s comments, put them in context.

Another point about some sites offering trading results feedback is that they often don’t go into the background behind the system. So they might show a storming set of results for one month and be raving about it, but ignoring or unaware of the fact that the system has a profit target of 10 and a stop loss of 1000, setting up a massive loss at some point in the future.

It is really easy to produce live or demo trading records with the bots you are following through the great website http://www.mt4stats.com/. The best reviews show you the actual results the tester is getting in their demo account through MT4 Stats or a similar service.

With this in mind, here are some of the bot result sites that I’ve found to be useful recently:

http://www.forex-robots.com/ Still a little wary on this one as it’s a new site. I’d take their ratings with a pinch of salt for now, but the raw result charts make for interesting reading.

http://www.donnaforex.com I haven’t sampled the coaching service, but the forum is incredibly useful with a selection of live bot tests. Click on community to get to these.

http://fxreviews.blogspot.com/ A very useful collection of independent reviews on various trading bots. He seems to have a similar take on things to me – i.e. cynical!

http://duyduyfx.blogspot.com/ Useful blog with live trading updates. Doesn’t go into the background on each of them though and why they might be high or low risk, but the results are useful.

http://www.pipcop.com/ Lots of live tests on multiple brokers. Useful stuff.

http://www.4xproject.com Test results from the latest bots. Very useful.

FAP Turbo Evolution

FAPT Evolution is released this week to the usual fanfare. You may already have received the barrage of emails about it. For once, there are ample live account statements available which is encouraging, but I’m going to hold fire until I see more details on the sort of system this is. Does it double up on losses? Has live trading been in line with backtests?

Lots of questions to ask and I’ll update you soon on this.

My trades

Out of the market at the moment. I tell myself that I would have caught yesterday’s rally on the S&P 500 had I not been out the office on Friday and thus behind on my research, but it’s easy to be right in retrospect!

My little mini systems are building up some good pips. 62 pips yesterday, 30 pips this morning and 248 pips over the last week. Took a bit of a slap on the 8th but it was recovered and more the next day. Excited with the potential for these and I’ll let you know more soon.

This week’s hot trading buttons

US retails sales this afternoon and the hotly anticipated Goldman Sachs report will be out later. Markets rallied yesterday on rumours GS’s profits would be $2bn +. Two ways to look at this.

1. They’ve made killing being the middle man in all this volatility and government bond issuance. Good news for Goldman’s but it means diddly squat for the real issues in the wider economy.

2. It’s good news for Goldman’s which means good news for the entire banking sector which means good news for borrowers as mortgages and loans will become more available.

Judging by the rallies today in banking stocks, it looks like the stock market believes the latter. My hunch is leaning towards the former, but in moments like this, irrational rallies can lead to meaningful recoveries. Confidence breeds confidence.

Trading wisdom

“Christmas is a time when kids tell Santa what theywant and adults pay for it. Deficits are when adults tell the government what they want and their kids pay for it.” Richard Lamm