A Forex auto trader is just a piece of software that follows the market and enters or exits trades based on one or more indicators. An indicator is just a rule e.g. If the price is lower than the 7 day average then buy, and if the price is higher than the 7 day average then sell. Most auto traders will combine that with more indicators and if enough of them think it's a good idea to buy then it will buy or the opposite for a sell order.
The best auto-traders work because they were made by full time traders that simply converted their manual trading strategy to the computer to take over. Ideally it will make all the same trades that the trader would anyway so it's just lets the trader trade 24/7 instead of just the hours they would be sitting at the computer doing it themselves. In this example the auto-trader is running on the same market data as the manual trader, the same computer and the same Internet connection. If you change any of these you will get different results, hopefully still profitable if it's based on a good strategy but you won't know until you run it on your setup, usually in a test account for a few months at least.
Using a different setup will change some of the variables. If you are not using the same broker as the trader you bought the software off you will be getting different rates and so the software won't be able to run the same. There is actually no "standard" exchange rate, each Forex broker is constantly negotiating with the banks to get a better rate for you, sometimes as fast as once a second. Different brokers also have different strategies for getting you a good price. All brokers basically want small spreads between the buy and sell prices, and they are usually a bit different. Example an auto-trader might have predicted a price to buy at, but with your broker the price doesn't drop that low, instead when it rises it goes a bit higher. You will miss the trade even though the amount it moved on the market was the same.
To a similar degree you computer and Internet connection will affect your results. If your computer is faster or slower than the computer the auto-trader was developed on, it will run the code faster or slower and enter the trade at a different position. Same goes for the latency of the Internet connection. It can be a good idea to rent a computer that is geographically closer to your broker and use it as a proxy to trade through.
Back testing claims are something to be weary of too. A basic close strategy is if the profit reaches a certain amount get out and take the win. If the price drops a certain amount get out and take the loss. Now if we set the take-profit always quite a bit higher than the stop-loss we don't even have to win fifty percent of trades. This is a good strategy but with back testing it can easily be manipulated to show the best results. The auto trader could be setup to simulate all those trades, but a thousand times and with slight different profit and loss values. It might even find one that returns 400% over one month. But it is basically guaranteed to be different values next month, and for the next six months.
A example of a good auto trader might be one that is based on some solid technical analysis theory, ones that aren't are just based on luck and that is just gambling. This auto trader would have then been run over a long time on live data. Then the analyst counts up all the trades over say a two year period and finds the percent of win trades. It might be fifty percent of trades, and the analyst has it sets up so on any win trade you win twice as much as you lose on a loss trade. Assuming the market behaves a similar way next year you should make a profit. You might have noticed that this auto-trader can't ever "win big" because it limits how much profit can be made each trade. Even if the market is still going up this trader will get out early. This is how the probability works, you are limiting your chance to lose big as well.
This method can work extremely well because of leveraging. Leveraging allows you to play with more money than you actually have. Basically the broker gives you a loan for as much money as you want. It is guaranteed buy the currencies you buy with it. The broker knows the exact value of your loan because they are the ones sending you the Forex rates. When you open an account with a broker you have to deposit money in it. This is exactly how much lose you can make on your trade before the broker performs a margin call and closes that trade for you. so if you had a $5000 account drops that much it's game over, but if your trade never drops you would never have need that money in the account anyway.
This brings us to drawdown and lose streak. The example auto-trader i talked about earlier would also have these statistics to check out. Drawdown is how low a trade has to go before it comes back up into profit. A trade might make $1000 but first the value of it dropped $6000 before rising. This would have forced a margin call on our $5000 account whereas on the account the auto-trader was originally tested on it might not. This doesn't have to apply to just one trade either, it can be over a series of bad trades. Same can happen for a lose streak if any lose streak multiplied by the average loss is larger than your margin than this auto trader probably isn't a good idea for you.
Remember when you do choose an auto-trader do your research see what Google has to say about it. And of course run it for a few months in simulation mode to see if it's really going to work on your trading setup.