All you need to know about Forex Robots
More and more often you hear the word Forex trading robots in the world of online finance. But what are they? Do they really work? Do you need them? What are the pros and cons of those robots? So, let’s try to find out the answers to all of those and more questions. We’ve also gathered some information you need to start using Forex trading robots. This includes how Forex robots work, what benefits they offer and how to incorporate them into your trading activity.
What is a Forex robot?
A Forex robot is an automated software that can trade currencies instead of its users. The robot will have been built as example of an experienced trader. The robot uses an atomized algorithm, which makes predictions based on certain conditions. For instance, the Forex trading robot can have the task to scalp GBP/USD during the weekend and to take advantage of lower trading volumes.
The Forex robot may also be programmed to buy EUR/USD when the RSI is above 30. When you download the robot. All you need to do is to give the tasks, and the robot will fulfill it in no time. It is the perfect chance for those, who have no clue how to trade, and for those, who have had some issues while trading for several times. In fact, it will track the market 24/7, and will analyze the market to fulfill the appointed task. Of course, you just have to allow the robot to act on your behalf. This is one of the reasons why those robots are gaining more and popularity among the society of traders.
However, we do recommend you to pay particular attention to the provider of the service, as some of them may not fulfill all the promises they make, so you should choose only trusted providers. After all, you will need to pay a fee to get hold of a proven Forex robot. As a result, you need to dedicate some time researching your chosen provider before parting with your money.
To sum up, Forex robot is an automated Forex trading tool, basically it is just a computer program or algorithm. Forex automated trading robots use technical indicators to help find profitable trading opportunities, although different robots will use different trading strategies. Significantly is to understand how those robots work. If you know that a piece of software can carry out trading when you can’t, and can process the volumes of data that would take you much longer, then it becomes an attractive prospect for many.
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Pros and Cons of automated trading systems
If you decide to use the service of the Forex trading tool before you should check the main advantages and disadvantages. Here we gathered the list of main for you.
Advantages of Forex robots
The robot also makes very clear and logical assumptions without being too emotional, as people can be. Sometimes a person’s judgment may be clouded with their emotions, and in the world of Forex there is no room for emotions, they will be only in your way. With a robot, orders will be executed automatically, therefore it won’t hesitate or doubt the decision.
We are talking about backtesting here, which means the robot will analyze the historical market before acting. It is very important to give clear instructions to the robot what to do in every possible scenario, as the robot obeys commands, and does not act on its own. The good thing, you can always test the robot on the historical market before the real deal, when your money is at stake. It goes without saying, that it saves your time and money.
The robots are consistent and are very well organized. They adhere to the discipline, that is why they are constantly working and checking the market, while people sometimes lack consistency when trading Forex, especially when they are losing. After a loss, it can be very tempting to skip the next trade, even though this could potentially be a winning trade.
Frankly speaking, the computer will always react faster on changing conditions on the market, so it can generate an order immediately, if it was told to do so. The difference in time may be very small, some few seconds, but they are sometimes crucial for the outcome. As we all know that speed on the financial markets may be huge.
With a robot, you can trade several accounts at the same time, and each account may have a whole different strategy to increase chances on your winning. A computer more skillfully copes with multitasking, than a real person, as it can perform within milliseconds. The auto trading Forex robots can also scour a range of markets for trading opportunities and monitor several different trades.
Disadvantages of automated Forex trading
However, in order to be fully in the picture, you should be aware not only of advantages, but also of disadvantages. That is why we have prepared some of them for you.
Sometimes other factors may be in the way, etc. the poor Internet connection, or the order gets stuck and never actually gets to the server. If you do not wish this to happen, it is always wiser to start with small amounts to check how the system works and to make sure everything is okay.
It may sound very promising that you use this tool, and never check anything. But it does not work like that. Several issues can occur such as loss of connectivity, power outage, computer crashes, and system quirks that need to be watched out for. So, sometimes all you have to do is to monitor a little.
There are a plenty of brokers offering their robot services. However, it very important to find out, which will help you indeed, because many may offer very promising services, but in fact it will be far as good, as it said. Make sure you read as much as possible before choosing the one to use. There many decent services, although there many not as much as well. The advertisement may show excellent result, and sometimes it may differ from the real life.
How to choose the right provider of trading robots?
Speaking about the last disadvantage, we decided to help you to determine, which provider of trading tools will be the best for you. It is of high importance not only ensure that the provider is legitimate, but also you should check whether or not it mirrors your trading objectives.
First of all, evaluate the Forex robot’s win rate, for the robot to generate more winning trades than losing ones. Mostly you will find out that very often robots providers use a loud advertisement to attract a wider range of customers, but some of them may slightly exaggerate. They advertise great win rate percentages, although in fact, they are 80% on average, it still not bad, but it does not guarantee you 100% success. As you might have understood, you need somehow verify the authenticity of the advertised win rate. And the best way to do this is to check the provider on a third-party platform.
Secondly, the best robots are 100% automated. In other words, the robot will trade on your behalf without any interruptions all the time. This is one of the most popular service, as you no longer need to sit in front of computer and doing mechanical tasks. But some people still wish to have some control, so if it is your case, consider using signals. The program will send you signals, when something happens, and you will actually the process.
Thirdly, you can find many strategies utilized by seasoned forex traders, and some popular than others. It includes swing trading, day trading, and scalping. Important is to differentiate the strategies, as there are no two the same ones. For instance, does it take a low-risk strategy that seeks to target ultra-small gains, or does it take more of a gung-ho approach for much larger margins?
Fourthly, sometimes a Forex robot may target all currency categories. If it does, the robot is likely to be active across all trading sessions. You have to select the trading pairs, or it will be active always. In other cases, the Forex robot might target a specific pair like GBP/USD or AUD/NZD. Actually, this is a good thing, because the robot was developed to be good for the one pair. So it specializes on one pair, instead of trying to do everything at once, which is a tricky business.
Finally, the question of price arises. In the very case, the common mistake when a customer tries to cut costs because there is always a trade-off between pricing and quality. Simpler, you will often find that the best Forex robots active in the space will charge a higher price for their services. On the other hand, there are a lot, which is cheaper, and yes you do save some money, but what good will be out of it, if it loses you money while trading. So be aware of the very fact, and set your priorities before choosing one.
Free or Paid Forex robots?
It is not a secret that you usually get exactly what you paid for, and in the world of Forex, it may be applied even more. Speaking about those robots, the same rule implies for sure. Think, why should a team developing really good product give it for free, and vice versa when it is free, why so.
However, there is a way for you to check the reliability of a free Forex robot without risking your many. For example, download the robot software for free, and then install it into Metatrader 4 or 5 platforms, and instead of allowing the robot to trade through real money, you can start with a demo account. Thus, you will check, how the robot performs, and who knows, maybe you will succeed with a paid robot as well. Then you can leave the bot trading for several days, and you will confirm your suggestions.
To sum up, Forex robots are one of the greatest inventions in the branch. They have a lot of advantages, which make the whole process much easier. Moreover, they increase the chances for the win. Although, you should remember the main cons as well. All you need to do is to check the broker carefully before making any decision. We advise you to take into account both pros and cons, compare several, pay attention to the price and reputation as well. Remember, that the robot works 24/7, so once the robot goes live, you can sit back and watch the technology do its thing. And do not forget that some providers may a bit overestimate their product, so try to find the more independent source. Also, always test your robot using a free demo account before you risk your own real money. But do not be afraid, we hope you found the article useful, and it will put you in the picture. We wish all the success in finding an excellent robot for you.