The True Cost of Automated System Trading… The REAL minimum trading capital

Time after time I come up with these websites that say that their expert advisors can be traded with 200 or even 50 USD. They say that people can start taking profits from the market with these extremely low investments in a reliable low risk manner. If your system was long term profitable and you were trading on a small cent account this still does not hold true. The truth is that besides the cost of any systems people buy they are also a bunch of additional costs that people do not consider go into automated trading.

First of all, in order to trade an automated trading system reliably you will need to have a VPS. A VPS or virtual private server, guarantees that you system runs 24/7 and with the minium possible latency towards broker servers. It is very important for anyone considering to trade the forex market with an automated trading system to actually get a VPS. It is in fact, VITAL.

The cost of a VPS can be less or more depending on the quality and reliability you want for your VPS. From 15 USD a month to almost 100 USD a month, these VPS providers guarantee reliability and stability for your automated forex trading needs. If you take into account a cost of 15 USD a month, then you would need to pay 180USD a year. If you are trading a long term profitable system with moderate risk an you get a 30% yearly profit, then you would need to trade a 600 USD account just to barely break even.

As you see, these factors that are usually not taken into account greatly affect how much profit you can make from small sums of money. To make it clear, you should not even bother to trade any automated trading systems if you cannot pay a VPS and have at least a 2000 USD to invest. If you do, then you will lose money towards your VPS fees, almost certainly. If you don’t want to pay a VPS, then you will suffer from latency and connection/power loses that will cost you more money than your VPS, and trust me, these issues will eventually arise.

I read a story once about a trader with a T3 connection who always kept a laptop with a dialup and a 3G card just in case he had any problems. One day, his 3G and his T3 failed and he actually had to use the dialup to close a very important trade. No matter how strong you think your power/connection is, it will eventually fail so it is a much better idea to have a VPS with a triple redundant connection in a fast access data center than to use your home PC or laptop.

Now if you would like to learn more automated trading systems and how you can design and program your own long term profitable expert advisors and how you can trade with a freely available stable long term profitable system please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. I hope you enjoyed the article !

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