What does a Forex Robot do?
Posted: Jul 07, 2019
Just about every forex trader has come across the term forex robot, but what does a forex robot do? In order to better understand the functions of a forex trading robot, let us first define what a forex robot is. It is very important to understand this, as there are many variants available for traders to chose from and making the right choice will ultimately determine the impact it will have on your balance.
Forex Trading Robot Definition
There are many different types of forex automatic trading robots available on the market. Some are entirely free of charge while others can be purchased either through a one-time payment or a monthly subscription. Free ones usually don’t earn any money for forex traders and therefore result in a lot of frustration. While paid ones tend to deliver better results, they are often too expensive which makes them uneconomical for most traders.
Then there are those which don’t require any payment, but a minimum deposit in order to operate. This gives forex traders a great balance of performance without fees and this is usually the best choice for you and your portfolio. A forex robot is designed to execute a trading strategy, free of emotions and without the impact of psychology which is one of the biggest loss making attributes of manual forex trading.
Some require the download of special software while other operate in the cloud and all you have to do is connect your trading account to a master account. With a forex trading robot, traders don’t need to spend their time analyzing charts or sorting through fundamental news released in order to find profitable trading set-ups. A forex robot does all this on auto-pilot and without the need of supervision. The most advanced solutions also take care of the entire trading set-up which means no data needs to be added by the trader in a true "run-and-forget" set-up. All tasks required to manage the portfolio are handled by the forex software and traders can enjoy the benefits of the forex market without having to do the heavy workload which is required in order to become a profitable forex trader.
Now that we answered the question "What are forex robots?", it is important to understand that profits are not guaranteed and selecting the right one for your portfolio will be crucial.
Pros and Cons of Robots
Two of the biggest benefits to forex traders offered by forex automation is the emotional free decision making process which will greatly reduce the amount of losses. The biggest benefit may be the time saved as trading robots are designed to function without supervision and fully autonomously. Therefore forex traders don’t need to invest their time and can simply rely on the forex bot to trade the portfolio according to the programmed trading strategy.
While forex robots take emotions out of the equation, most available in today’s marketplace are not profitable. They will function for short time periods which can last a few days or a few weeks, but then as market conditions change they will start losing money. This is one reason why many providers offer a free trial and a limited-time money-back guarantee. Once market conditions change, most forex automated solutions are unable to change and will execute their strategy which is no longer profitable.
Not all forex robots are created equal, so make sure the one you pick is build on the following two principles: The first principle is that it should be free of charge with a minimum deposit. The minimum deposit is key as it shows the commitment of the team behind the forex trading robot. Those who come without conditions are often left behind and become unprofitable very fast. The second principle is that the team keeps working on improvements and preferable offers a forex robot which learns from its mistakes. Artificial intelligence is the next revolution in forex trading, so make sure that your robot is based on it.
I am a software engineer in Spy-FX company. We have more than a ten years of experience in forex trading software.