Step by step guide to find a profitable forex trading expert advisor and scams to avoid.

This task is not as easy as buying a robot that is showing good results. In fact, a lot of EA sellers, I would say about 60% are scammers and nothing else. The good new is that they are easy to avoid if you have a methodology in your researches. So let's see how to manage this researches !

1) Forget about the MQL5 community. 

Just think to a simple thing : If a trader has a profitable forex trading expert advisor, it means that he can make money with it. So why would he need to sell it for a few dollars at only a few newbies ? Maybe to make more money right ?
Not sure. If the EA seller really had a profitable trading expert advisor, he wouldn't sell it simply because that is not the way that will make him earning big money. The best thing to do for this trader would be to establish a profit sharing model. The client can use the EA for free but has to share his profits with the EA's creator. The EA's creator would make a lot of money this way if his algo is really profitable. Also, people are not stupid, EA sellers know that. So if they keep selling the EA, it just means that it is not as profitable as they said. 

It is very easy to make a fake backtest. They can code an algo programed to buy or sell at a certain date of time. For exemple I know that the 15/05/2016, the stock ABC went up by 21%. I programm the algo in a way that will make it buying it the 14/05/2016. This way, the backtest will show an impressive P&L which is just a fake !

But you can buy indicators on the MQL website. To be honest, there is a lot of very innovative indicators out there. So what I would suggest is to work with these indicators if you don't really have a trading methodology and then build your own trading system. 

It is by far more rewarding to build your strategy and to profit from it than just buying smeone's EA.
2) Only trust EAs with a verified track record.

If your EA seller don't provide you a true track record, then just forget it, you will get scamed. Also forget about demo account results, it doesn't mean anything because markets conditions varies a lot from real to demo. When trading live, your broker will probably do his best to make you loose your trade. Also spread will be real and often higher than in demo.

If the EA's seller don't show a real account track record on his website, you can ask him for it or for a screenshot of his real account.

Where to find verified track records ? You can find good EAs and trading signals on myfxbook. Please take look at the picture below : you can see that for this strategy, track record had been verified so you can definitely trust this system.
3) Never trade with martingales

A martingale is when you increase your position size after a loosing trade. It will work as long as you will have a high winning probability but the first time when you will have a black sequence (several consecutive loosing trades), your trading account will crash and you will have a margin call. Don't want this to happen ? Great so forget about martingales.

4) Try to test an EA on demo before buying

This is very important to test the EA in demo because you will see how it works, you will be more familiar with and of course you will be able to make a first estimation of how much you can win with it.
But becarefull, trading on demo may not totally reflect how the EA will perform on a real account : spreads and commissions are not the same and in real, the broker will be your counterparty so he will do his best to making you loose in the long run.

I would say that demo testing is good for strategies that are not scalping and that may not be impacted by the spread and broker's manipulations. For scalping EAs, demo results don't worth a cent.

5) Only deal with sellers offering a "money back guarenteed" policy.

It means that they are confident in their products so you can trust them more than the others. Therefore, you can in first time ask them to try in demo for free and then you can buy it. If your conclusion is that the expert advisor is not profitable, then you can use their money back polocy and being refunded.

6) Don't trust binary options systems

Binary options systems are usually advertising in a spamming way : a guy pretends to be a millionaire and promise you to give you his trading system. This exists since a long time and this is probably the most famous scam in the industry.