The Dark Side of the Trading Robots Industry

[First of all, I am all for fully-automatic, assisted and algorithmic trading. The following is not to be taken as a don't do EAs rant.]

If you have been in this world long enough (few months should be enough), you'd notice the abundance of products that go by "Mega Profits Forex Robot Trader". I never used [read: was fooled by] any of those so I won't do any baseless claims, but instead discuss the common traits of this "industry".

[EA, Expert Advisor, refers to scripts with which you can automate trading-related task in MetaTrader trading platform, other platforms certainly have equivalents, may or may not be under the same name]

Proof of Profitability Problematic
EA marketing has one big problematic. To sell one, you have to prove that it is profitable to some extent and to some consistency level. Now how do we verify this? statements? testimonials? a picture of a Ferrari with the name of the EA on its plate, all in a single-page marketing website? [Who the hell buys products from a single-page praise website?!]

Bogus Statements and Reports
Even when we do see statements they're often of a very short period, where the EA performed best. With no "tangible" proof that it has been reasonably above watermark for a long enough period to be made in production state. But wait, can you really tell a true statement from a bogus one? Not in the electronic world!

Real time calls?

The one good and sure way is to take real-time calls of it. But then who will buy the product if you can use its calls without purchasing it? Maybe a trial-before-buy program?

"Why is EA lose money?" attitude

What do you do with customers who do not understand that an EA isn't a bullet-proof crystal ball? Were they fooled by those silly 100% No Loss Guarantee badge?

[credits to `myke` who kept this badge in his computer!]

[this is a comic style rendition of a real badge/seal found on the website of a trading robot product, isn't that just...]

Biased Affiliates

Having affiliates sell and promote your product serves for a good Viral Marketing scheme. But what you don't want is an affiliate who will recommend you a product just because he/she/it gets a cut off the sale. the EA industry is no exception.

Stay tuned for the up-coming comic on this very topic!