Trading Bots and Systems: Testing Performance Claims and Hidden Costs

A trading system can turn a set of assumptions into a polished performance chart without proving that customers will earn the same results. Automated tools and AI branding can make those claims appear more sophisticated while leaving familiar problems with hypothetical testing, fees, and fraud. This guide combines the CFTC's warnings about trading systems and AI-based pitches. It helps buyers ask what was actually tested, who operated it, and whether real trading results can be verified.

Adapted from public-domain educational material published by CFTC. Fynoptic has organized and edited the material and added introductory and practical guidance. Sources were reviewed on October 28, 2026; original publication dates, where available, are listed below.

Customer Advisory: AI Won’t Turn Trading Bots into Money Machines

Fraudsters are exploiting public interest in artificial intelligence (AI) to tout automated trading algorithms, trade signal strategies, and crypto-asset trading schemes that promise unreasonably high or guaranteed returns. Don’t believe the scammers. AI technology can’t predict the futureor sudden market changes.

Scammers claim AI-created algorithms can generate huge returns—sometimes tens of thousands of percent—or yield 100 percent “win” rates. These dubious claims have been made about algorithms that automatically place trades, known as “bots,” and algorithms that provide buy and sell signals to subscribers, among others.

In recent years, the CFTC has alleged several defendants defrauded customers by operating or marketing commodity pools, digital assets, or “investment programs” that promised regular, above-average returns through the use of AI. But, these promises were false and, instead of getting automatic money-making machines, customers lost tens of millions of dollars and, in one case, nearly 30,000 bitcoins—worth about $1.7 billion at the time.[1]

Before you trust your money to trading platforms that claim AI-created algorithms can generate huge returns, you should:

• Research the background of the company or trader; conduct a reverse image search on key personnel to verify their identities.
• Research the history of the trading website by checking the age of the domain registration at lookup.icann.org.
• Get a second opinion. Talk the investment over with a financial advisor, trusted friend, or family member.
• Know the risks associated with the underlying assets. Also consider the impact fees, spreads, and subscription costs would have on returns.

Be wary of the hype around AI especially when promoted by social media influencers and strangers you meet online. You can report fraud to the CFTC and to the FBI.

[1] For examples of recent cases, see CFTC Press Releases 8803-23, 8697-23, 8621-22, 8549-22, 8510-22, 8493-22, 8438-21, 8115-20 and 8047-19,https://www.cftc.gov/PressRoom/PressReleases.

This article was prepared by the CFTC’s Office of Customer Education and Outreach. It is provided for general informational purposes only and does not provide legal or investment advice to any individual or entity. Please consult with your own legal advisor before taking any action based on this information. The CFTC cannot attest to the accuracy of information contained in any non-CFTC references or websites. Reference in this advisory to any organizations or the use of any organization, trade, firm, or corporation name is for informational purposes only and does not constitute endorsement, recommendation, or favoring by the CFTC.

Commodity Trading Systems Sold on the Internet

The CFTC has seen an increase in websites that fraudulently promote commodity trading systems and advisory services. The following information is designed to help you identify this potential swindle.

What Are Commodity Trading Systems?

• Computer programs that signal when to buy and sell commodity futures and options contracts
• Signals are based on mathematical formulas and are typically technical analyses of trading data, such as trading volume and prices
• Signals are not based upon fundamental analyses of economic factors, such as supply and demand
• Technical analysis attempts to predict future price movements based on historical prices, price relationships and price trends

Beware of Hypothetical Trading

• Hypothetical trading results typically are based on simulations using historical price data or "real time" computer trading
• Promoters typically pretend they traded futures contracts at market prices that occurred sometime in the past
• Trading results calculate what these purported trades would have achieved had they been placed, based on actual historical prices
• Results often show impressive trading results and large net profits with only a few, small margin calls.
• The CFTC requires that the presentation of hypothetical trading results be accompanied by a specific cautionary statement warning of the inherent limitations of these results
• False claims of performance based on real trading when in fact the results are based on “hypothetical” or “real-time” trading
• Hypothetical results may not adequately take into account the ability of a trader to absorb trading losses or to meet margin calls. Many traders are unable to survive several consecutive trading losses and/or margin calls
• Hypothetical trading results assume that futures contracts have been bought and sold at specific prices. Since these assumptions have not been subjected to actual market conditions, they may overestimate or underestimate the performance of a system

System Shortcomings

Systems often fail to consider:

• Market circumstances that affect traders and their decision-making processes
• A change in the trader's financial condition
• A stop-loss order might be executed at a better or worse price, or not be executed at all
• bid/ask spreads which might not be reflected in the prices used in hypothetical trading
• Be alert for the possibility that the system promoter manufactured results by selecting historical trades that would have yielded the greatest returns
• The actual execution of a trade could impact the price paid, especially in less liquid or illiquid markets

Beware of Hidden Costs

• Profit claims of promoters may fail to take into consideration the cost of purchasing or leasing a trading system and a subscription for a mandatory data feed from a vendor
• System promoters may also fail to take into consideration the impact on profits of commissions and fees charged by brokers in connection with futures and options trading
• A user should take all of these costs into account because they raise the break-even point in trading

Is a Futures/Options Trading System Right For You?

• Are you able and ready to educate yourself about futures and options?
• Can you afford to lose your entire investment and more without a change to your lifestyle?
• Do you have the financial ability to risk losing much more money than the initial margin amount and sustain trading losses to meet margin calls?
• Do you know if the advertised results are based on actual or “hypothetical” trading?
• If the trader used the system in actual trading, how did he or she fare?
• Will the system promoter provide you with independent verification of the claimed trading results?
• Do you know the total cost of the system including purchase, fees and subscriptions?
• Do you know the current and past disciplinary status of the system promoter?

Warnings

• The CFTC urges you to be skeptical when promoters of trading systems and advisory services claim that their products and services will earn high profits with minimal risks
• Whether or not a trading system is used, commodity futures and options are typically high-risk endeavors
• No trading system can guarantee profits
• Not all system promoters are required to be members of the National Futures Association or registered with the CFTC. Check their registration and disciplinary status with the CFTC and the NFA.

If you have questions, are aware of suspicious activities, or believe you have been defrauded, please contact the CFTC immediately at 866.366.2382 or file a tip or complaint.

Putting this into practice

Separate live results from backtests and simulated trades. Ask whether the displayed performance includes commissions, subscriptions, trading costs, and losing periods. If the seller claims a system can reliably predict markets or eliminate loss, examine that claim before granting account access or paying for the software.

Sources and further reading

• Customer Advisory: AI Won’t Turn Trading Bots into Money Machines — CFTC
• Commodity Trading Systems Sold on the Internet — CFTC