While there is a wide variety of Forex robots (or automated trading programs) available, all of them do several basic things to help you trade more efficiently. The most important function they serve is making the actual trade for you without the need for you to be constantly logged onto your account. These trading programs enable you to specify an entry and exit price to have the program make your trades. This is a big advantage since it eliminates the need for you to constantly monitor the Forex market and pick the best time for your trade. By having a program watching a specific currency pair you can be sure to make the right trade at the right time for the biggest profit.
In addition to automating your trades, most Forex robots will also provide some additional guidance for the market. Most of these programs rely on years of historical data to find good trading opportunities for you. In many cases you can enter some simple parameters on the lot and pip size you are hoping for and the Forex trading robot will take care of the rest for you.
In recent years these automated trading programs have become very popular with a segment of Forex traders who swear by their accuracy and efficiency. Unlike manual trades that require time and effort to complete, these trading programs automate everything. Their programming operates on cool logic that eliminates the emotion that most traders placing their own trades succumb to when facing a profit or loss. By specifying exact entry and exit points these trading programs ensure you receive the profits you expect and will never chase a profit or loss in the market as many traders are known to do.
Forex Robots Have Their Challenges
While there are many benefits to using an automated trading program, there are a few downsides as well. One of the biggest dangers is that many brokers prohibit the use of these trading programs and can deactivate your account if they suspect you’re using one. Another issue is that most of the robots are based on a specific style of trading and don’t provide a lot of flexibility. You have to trust the internal logic of the program to choose the right currency pair to trade. Surrendering this level of control over their investments can be a challenge for many investors.
These programs can also be expensive and may also involve an ongoing monthly charge for updating their charts. While this may seem like a small price to pay if you’re making money, it can still impact your overall earnings in the Forex market over time when compared to trading manually.
Forex Robots are not Emotional with the Market
A forex robot will follow your directions no matter what. It won't panic and close the trade because it feels like it opened it too soon or too late. It plays by the rules no matter the condition or status of the markets.
Forex Robots Trade While You Sleep
Forex robots stay on until you turn them off. You could be sleeping or just enjoying time with your family. The robot will keep its eye on the market and trade according to the rules that you set.
A forex robot is not a good solo strategy, because they are fallible. Not only that, but it's good to understand the markets and trading that you are looking at, even if the robot is doing the work. That experience comes best as trading forex regularly. Forex robots can help you test and develop strategies that work, if you understand how to use them.
It's not likely that a forex robot will make you a millionaire, despite what you may have heard, but it could add a few points to your bottom line. Be careful who you deal with and always test them on demo accounts for an extended period of time