• Section: Money Guide - Category: Invest Online
• Written by Kelly Price

Many forex traders want to use forex robots and make automatic forex profits but if you want to follow a forex trading system then you need to be able to spot curve fitting or you will lose...

So what is curve fitting?

Curve fitting is testing a system over back data and bending the rules of the system to fit the data. This is similar to shooting at a barn door with a blindfold on and then drawing a bulls-eye around everyone afterwards!

Most forex robots you see are curve fitted and a good clue is - if you see the disclaimer below with the track record read it very carefully!

"CFTC RULE 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading

programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown".

Check any forex trading system you buy for the above and if you see it the track record is meaningless.

Anyone can make a profit in hindsight and bend the rules to fit the data in a back tested simulation - its easy.

The problem is vendors simply make up track records and curve fit them, knowing they will lose in real time (if they had confidence in them, they would of course trade them themselves and have a real one), these robots rely on clever marketing copy and the fact that most traders simply don't read the small print. These traders are either na

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