HFM information and reviews
HFM
96%
FXCC information and reviews
FXCC
92%
FxPro information and reviews
FxPro
89%
FBS information and reviews
FBS
88%
XM information and reviews
XM
86%
NordFX information and reviews
NordFX
86%

Trading robots. Should you use them in Forex trading?


To increase the profitability of trading on the Forex market, some private traders and investment companies automate the process using trading robots (Expert Advisors). Forex trading robot is not only a modern solution, but also a valuable upgrade to the functionality of a trading terminal. However, one should be attentive to the quality of this software, in particular to the accuracy and speed of their work. Let’s look at the trading robot concept through a magnifying glass and decide if you need it for your daily Forex trading. Another vital question to ask is how to choose one among the many options on offer today? We’ve gathered the answers in the article below.

A trading robot is a program to automate transactions on the Forex market. Simply put, a trading robot contains a set of rules: when to buy, when to sell, what factors to take into account when making deals and how to prioritize them, and what to disregard as irrelevant. It may look like the work of a professional trader, only everything works automatically. And this is a result of rocket-speed changes the fintech industry has been going though. In the US, such services (such as Betterment or Wealthfront) are popular and run billions of dollars of private investors.

In the international financial market over the past couple of years, several analogues have appeared. Since the use of robots in investments has recently been actively developed and advertised, we will try to figure out whether they can be useful for a private investor and whether to use them on Forex market.

What is a trading robot?


As the actions of the trader within his strategy can be described as repeated, they can be split into a string of successive manipulations that are performed in clearly defined circumstances. This stability makes it possible to crystalize algorithms, to write a program on their basis that will imitate the trader during his working day, ruled by the same conditions that the trader is ruled by. This This is the mechanism that lies in the heart of the trading robots concept.

Pros and Cons of using a trading robot


Pros

No one will argue that involving a trading robot means removing a serious stress load from the trader. When even the most experienced trader loses concentration over time he starts to make elementary mistakes. If he then tries to correct these mistakes by taking an unreasonably high risk he may easily be zeroing his account overnight. The emotional component among other human factors ruined more than one successful currency trader.

A forex trading robot can have many names: an advisor, an expert, or mechanical trading systems. All of them are designed to maximally automate the process of trading in Forex. Their main functions are:

Forex robots can be written with different drawdown assumptions, for example, from 5 to 60% depending on the implemented strategy. There are such robots that are able to catch price fluctuations in intervals of two seconds and have time to make purchase / sale transactions, which people obviously cannot physically and intellectually do.

Cons

Automated trading system has its drawbacks. Each adviser for forex is developed by a person, carrying in his algorithm and his erroneous perception of the market. Secondly, trade experts have no intelligence, which allows them to make mistakes, based on the erroneous testimony of their technical analysis indicators. Thirdly, the expert cannot make independent decisions when the market situation changes, which may lead to an increase in risk from potential erroneous transactions. Fourthly, over time, the market changes so much that the relevance of the adviser decreases, and this requires optimization and a series of testing. To this can be added the exactingness of some experts to the size of the deposit and the high cost of really good advisers. Besides, some forex brokers do not allow the usage of trading robots.

What are the criteria for choosing a robot?


Everything is simple here. Look at the profitability of the robot in the past, the level of risk and, in principle, the openness of the system. Do not agree if you are told only about profitability and are not informed about risks.

When choosing a trading robot, remember the importance of minimizing risks. Ideally, several robots with different trading strategies will be connected to the account. So you will not depend on one system and are less likely to face force majeure cases.

Undoubtedly, on the Internet you can find certain ratings of robot programs for Forex, but among which aggregate sample they were compiled and whether it was representative is unknown. At what time period was the robot tested? How many traders were involved? All these questions, in most cases, remain unanswered. Therefore, study the ratings as you surf the market for choices, but make the final decision after testing the robots preferably independently or in a tandem with an experienced trade you trust.

The choice of a forex trading robot must begin with determining the goal pursued by the trader and, first of all, with an assessment of the expected profitability of the adviser. You need to understand the higher the profitability, the higher the risks. Therefore, the trader must evaluate acceptable risks for themselves, corresponding to the style of trading. This should take into account the rules of money management.

Many robots show efficient trading only on certain types of market. Therefore, a robot designed for a trending market will cause losses during flat periods. It is important that the expert does not lose money earned during periods favorable for him. Testing allows you to evaluate the maximum drawdown in an unfavorable market and evaluate the profit factor of a trading robot.

It is necessary to dwell separately on paid and free advisors. From my own experience, I can say that plums are possible not only with freebies, but also with paid robots. As a rule, paid advisers are distinguished by detailed instructions and the opportunity to receive technical support directly from the algorithm developer.

What are the best forex trading robots in 2019?


Again, the better the work done by programmers and experienced traders when creating and writing a Forex robot, the more expensive it will be. There are also free robots, but they can be suitable only for de-testing. Otherwise, the range of prices for various trading robots is huge - from $ 30 to $ 30,000. Another question is, can a robot worth a thousand times more expensive be at least a quarter of this number more efficient than a cheaper one?

Any application program (forex robot, technical indicator or other script) is written for certain trading platforms and terminals. The most authoritative and popular of them is MetaTrader versions 4 and 5. In essence, MetaTrader has the most various scripts in its own MQL4 IDE and MQL5 IDE development environments written in MetaQuotes Language versions 4 and 5, respectively.

Author: Kate Solano, Forex-Ratings.com

RELATED

What is staking and how does it work?

When it comes to earning with cryptocurrencies, investors usually consider buying prospective assets or mining them. However, there is an alternative...

What is Bond Market

The bond market, also called the debt market or credit market, is an online marketplace where people trade bonds. These bonds can be issued by governments...

MultiBank Group: Spot Bitcoin ETFs: Revolutionizing Cryptocurrency Investment Landscape

The emergence of Spot Bitcoin Exchange-Traded Funds (ETFs) marks a transformative phase in cryptocurrency investment. By offering a regulated pathway to Bitcoin's price movements...

How to earn cryptocurrency without investment

Everyone enters the cryptocurrency space to make money, but not all of them succeed. Many people either give up or lose money because they do not correctly understand how to make money with cryptocurrency.

Gold at 8 years highs. Why so and who will benefit from it?

The business of storage operators with a high level of security, in which physical, not virtual, metal is stored, is in a boom of demand from wealthy investors...

Is EOS A Good Investment? Top Altcoin Insights For 2021

The cryptocurrency market is filled with innovation and ambition, where projects aim not just to be platforms for developers to build on, but full-scale ecosystems that can...

Smart contracts explained: What is a smart contract?

Smart contracts play an integral role in the blockchain ecosystem, enabling the creation of decentralised applications (DApps) and programmable payments. In this guide, we will explain...

Cryptocurrency Post Apocalypse

At the junction of 2018 and 2019, bitcoin's price was at the bottom - the asset was trading at 3200 dollars. This was the price level of mid-2017...

What is Equity Trading?

Trading on equity refers to the buying and selling of stocks or corporate shares, usually referred to as equities, on the financial market. Investing in shares may be done in a few different ways...

What are binary options in the global financial market

In the global financial market, as in many other areas of commercial activity, there are often categories that seem to the uninitiated person very difficult to understand and use...

Navigating the Exciting Challenge of Trading Over 150 Stocks with ModMount

ModMount presents traders with the exhilarating opportunity to dive into one of the largest and most dynamic online markets – the stock market. This platform challenges traders, whether novice or seasoned...

Best Forex Expert Advisors for Profitable Trading in 2022

As many of you know, the foreign currency markets are open for trading 24/5, which makes it very hard for a human to keep track of everything that's going...

Advantages and disadvantages of forex rebate

If you are really concerned about your profit on the forex market you should definitely use one of the mayor forex rebate providers...

Crypto trading: what are cryptocurrencies?

Cryptocurrencies are digital money, which represents a class of assets that do not exist in physical form but are created virtually through computer technology...

Oscillating Indicators - Slow Stochastic

The slow stochastic is an oscillating indicator. Developed by George Lane , it can alert you to a shift of investor sentiment from bullish to bearish or vice versa...

Forex Education: Does It Make Sense?

Work of any nature requires considerable effort, both moral and physical. Indeed, in addition to having to spend a considerable amount of time on theory...

Netflix Stock: Should You Invest in Netflix in 2022?

We can argue about whether investing in Netflix (NFLX) stock is a good or bad option, but there is no denying that the American entertainment company has changed the rules of the game...

What Factors Influence Tezos (XTZ) Token Price?

Cryptocurrency continues to gain more and more attention with time. The systemic worries that accompany traditional assets, including stock fiat currencies...

How to stake Ethereum

Ethereum is switching into a proof-of-stake consensus to allow the network to achieve scalability. Ethereum staking is when people lock up Ether (ETH) for a given time...

Earnings Season & Its Significance for the Stock Market

Earnings season for the first quarter of 2022 is upon us. Here’s what you need to know and what to expect from the markets during this period. Earnings season refers to the period...

Vantage information and reviews
Vantage
85%
FP Markets information and reviews
FP Markets
81%
IronFX information and reviews
IronFX
77%
T4Trade information and reviews
T4Trade
76%
Exness information and reviews
Exness
76%
Just2Trade information and reviews
Just2Trade
76%

© 2006-2025 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.