Evaluating Forex trading systems is the very first thing you need to do before you buy a Forex robot. Although there has been much written on the subject, most of it seems to be the derivative work of a trader named Tony Hosea. I studied his work and found him to be spot on when it comes to systems evaluation. Here are a few time-tested tips that will help you select the Forex system that's right for you.

How much money does it take to realistically trade the system -- Without knowing this you are really just flying in the dark. No serious trader would ever trade a system without knowing the amount of capital needed to successfully trade it. For instance, a system designed to trade a standard contract of each of six currency pairs would not be suited for a $2000 account.

Has the system been thoroughly tested -- It never ceases to amaze me how many people run out and buy the first robot they see after looking at one or two months of trading results. This is a bad idea and let me explain to you why. If the market was moving up during those two months the system may have a bias toward taking trades on the buy side. This means that when the market does start to sell off you could possibly get your head handed to you and that's just not good. The general rule of trading system track records is the more data you have the better you can evaluate the system.

Does the system have proper risk control -- Believe it or not many robots have horrible risk control. One reason for this is that vendors are way too busy trying to impress potential customers with a high percentage of winning trades, rather than creating something which will help customers profit in the long run. I've seen systems that risk 30 pips for everyone pip of profit. These type of systems are obviously designed for much braver man than me. I wouldn't touch a trading system like that with somebody else's 10 foot pole!

Is the system is one you can adhere to -- Not all systems are compatible with your personality type. While many systems look great on paper and may actually be great in real life, they can be very difficult to trade. There are systems designed to take huge risks, but some of these also come with huge rewards. As long as these are balanced properly such a system can be extremely profitable.