What Are Forex Robots?
Forex robots are more correctly known as expert advisors. Forex robots are software that are designed to perform automated or semi-automated trading on the forex trader’s behalf. If the forex robot opens a trade position on the trader’s behalf, then the forex robot is referred to as a fully automated expert advisor. If the forex robot displays a pop-up window which alerts the trader to the existence of a trade signal based on the robot’s strategy code, but leaves the execution to the trader’s discretion, this is a semi-automated expert advisor.
Benefits and Disadvantages
There are benefits to using forex robots. But there are also some serious pitfalls to their use. We will examine some of these below as a way of helping traders use forex robots responsibly.
Forex robots have obvious benefits. What can be better than having a forex account traded completely on autopilot? Forex robots can be used to achieve this thereby removing the stress of having to analyze charts for trade opportunities, or sitting all day by the computer waiting for the opportunities to develop, or taking the risk of losing one’s job by switching between the work screen and the trading platform while in the office. Many employers will not be amused by staff not being fully attentive and committed to tasks in the office, and naturally, not many a boss would be comfortable with employees having alternative sources of income that would give the worker some degree of leverage in the employer-employee relationship. So by having a forex robot doing the trading while the trader is involved in either his day job or some other venture, a lot of benefit is derived from this arrangement. In addition, robots are designed to trade without emotion. Emotions can become a very negative influence in trading, and by seeing the opportunity and being able to know when to open and close trades according to the pre-programmed strategy, the forex robot is able to make an informed decision without equivocation on the trader’s behalf.
Do problems occur when using forex robots? They surely do. These problems usually occur when the robot was either programmed on a faulty strategy, does not accommodate proper risk management in its working algorithm, or is just a junk product. Most forex robots sold online are junk products; the handwork of the numerous scammers that are drawn by the allure of the $4 trillion that changes hands daily in the forex market. A certain individual in a developing country made $50,000 selling a pirated forex robot in one day at a seminar he organized, easily raising money for a new business of his while his clients’ accounts subsequently took an unbelievable battering from his defective product. Such unsavoury stories are a clear example of the problems that could occur with the use of forex robots.
How they Help You Trade
For those of us who have day jobs or just cannot stand the stress of sitting in front of a computer and staring at those confusing indicator and charts, the forex robot is the answer. However, the best results only come when the trader is actively involved in the development of the forex robot. This is something that not many traders who use forex robots understand.
If you are using a forex robot, chances are that you may have bought it online or may have obtained a pirated version of the software. Whatever the case, commercially sold robots have one flaw: they do not usually factor in the individual situation of every trader. Just as our faces are all different, so are our needs, aspirations, targets, and capacity to handle risk different. So while a trader may find a forex robot suitable for his style of trading and his risk appetite, others will not be so comfortable. This is one point that many traders are yet to fully comprehend and so it is not surprising that there are usually a lot of complaints with 99% of commercially available robots.
The best kind of forex robot is the one built to the trader’s taste. Not everyone likes to buy clothes off the rack because such clothes may not necessarily be the best fit. Sometimes, the best clothes are those built/customized for the wearer, and that is just the same thing with the trader. Only the trader can tell what his own risk appetite is, the capital available to him, his trading habits and his profit targets. Therefore, the best way to go in using forex robots is to first get a working strategy that fits the trader’s attributes, then get a programmer who has the skill to transform the strategy into a programmable code, and then test the robot in live market situations using a small capital account in order to fix any bugs and get a perfect finish to the product.
When everything is done, attach the robot to the chart you want to trade after installing it in the appropriate folder (MT4 client à Experts àIndicators), and once it sees an opportunity, it will pick the trade.