A forex robot is a computer program that uses technical signals to determine whether to enter a trade at a certain time.
The idea of using forex robots is to allow a trader to avoid the psychological element of trading.
The forex robot will run continuously placing trades signaled by mathematical algorithms.
These types of trading systems also known as Expert Advisors (EA) are purchased online or through Meta trader.
Why Do Traders Use Forex Robots?
Trading also requires a trader to be at a computer screen watching price charts for long periods.
This is where for some traders a forex robot will become very attractive.
Forex robots provide a way for a trader to make profits without needing to be physically or emotionally connected.
They are able to provide the following functions.
- Initiating and exit trades
- Continuous automatic trading
- Copying trades to other trading platforms
- Managing opened positions
- Generating signals
This sounds like a Holy Grail for traders, but lets have a close look at what a forex robot actually is.
How Do Robots Work?
A forex robot is software with an inbuilt programme that has a code with a set of instructions.
These instructions or rules allow the robot to make automatic trade decisions without a traders input.
Most robots use the MQL scripting language with MetaTrader, known as Metatrader expert advisors.
There are some robots that can thoroughly scan the market looking for opportunities with high levels of accuracy than humans.
You can instruct a robot to follow technical analysis such as indicators, candlestick patterns, support and resistance levels.
It can be programmed to make a sell order based on technical analysis such a the price hitting a support level.
The trade targets can also be coded on a robot allowing for a take profit and a stop loss level to be included.
Do Robots Really Work?
There are a wide variety of forex robots available online.
Traders should exercise caution when buying these types of trading systems.
Many of these companies selling forex robots have sprung up over night and might have very little credibility.
Some will try to lure you in with money back guarantee’s and when they have already taken your money they then disappear.
Often companies will cherry-pick their successful trades to give the allusions of successful results.
They might also use curve fitting to generate impressive results when back-testing a system.
Although there might be some robots that do appear to work, at the end of the day there is no Holy Grail robot.
If there really was a trading system that was able to guarantee great results then it most likely would not be shared to the public.
Caution should be taken when thinking about purchasing a forex robot, do your research first.
Know How To Trade Before Trusting A Forex Robot
If you don’t know how the markets work then how can you put faith in a robot?
Only by fully understanding the markets can you really learn how to build a reliable trading strategy that works.
There is no “get rich quick” method, being consistently profitable at trading takes more than just activating a robot.