Forex is a complex marketplace in which currencies are traded. There are trillions of dollars being circulated throughout this marketplace daily, and the market continues to grow thanks to innovative technologies like Forex robots. With so many opportunities present in the Forex market, people have been looking for ways to maximize their returns. This is where Forex robots come in. These robots are being used by Forex professionals, but are they worth the investment?
If you are interested in Forex robots, then you should gain some understanding of automation and how it can be used to boost efficiency in Forex trading. It may also help to understand the potential for gains in Forex investing. We’ll discuss what you need to know about Forex trading before investing in a trading robot and some reasons why Forex bots are worthwhile for the right people.
6 Reasons to Use Forex Trading Robots
If you’re looking to up your Forex game and leverage the power of basic AI to up your trading game, Forex bots can help you. We’ll discuss the top 6 reasons why you should be using Forex robots. These aren’t the only reasons, but it is a good place to start!
They Save You Time
Forex trading robots can save you time and improve your profitability by allowing you to trade 24/7. This can allow you to expand your operation and secure greater profits. Being able to make trades even when you are not physically online can also allow you to take advantage of trading opportunities that you otherwise may have missed out on.
They Increase Your Efficiency
Forex trading robots allow you to navigate the Forex market more efficiently, allowing you to pick up on trends you may have otherwise missed. The advantage presented here is that you can manually adjust your robot to trade based on current trends. This increased efficiency may lead to better returns over time.
Improved Tracking of Market Data
Forex trading robots can help you keep track of market data, making it easier to develop insights that can allow you to profit on certain trades. With more knowledge of market trends, you can speed up decision making and capitalize on timely opportunities more frequently. With a Forex robot on hand, you have much greater control over market data. This data can be invaluable if used properly.
They Are Almost All Customizable
Forex robots can be customized, meaning you can focus on specific areas of the marketplace without any additional work on your end. You choose what your robot is programmed to do, therefore you have the ultimate control over how it functions. If you need multiple robots to perform separate tasks, you can arrange that solution as well.
They Offer Portability
Forex robots can be shared, meaning you can use them on multiple trading accounts or share them with members of your firm. Just make sure that it is within the terms of your license to do so, or there could be trouble with your broker.
Versatility Is Their Game
Forex robots are versatile and can be used for nearly any common function of the Forex market. Having access to one will make it easier to traverse the Forex marketplace. With Forex robots on hand, you can make trades that otherwise may have been inaccessible.
Are Forex Robots Legal
People who are considering implementing Forex robots in their trading strategy may be concerned about the legality of these tools. Some people may think that they would be illegal or highly regulated because they offer traders and advantage, but this is not true. For the most part, Forex robots are entirely legal.
There is one caveat, though; many brokers do not allow the use of robots. One reason brokers don’t allow trading is that there are many scams being sold to innocent traders every day. These scam Forex robots promise returns to victims and fail to deliver. Different regulatory systems have different ways of handling traders. Some allow Forex trading with robots, others don’t. Overall, most reputable and established brokers will allow users to implement Forex robots as long as they follow certain guidelines.
There is a difference between buying and selling robots though. Some robots are allowed if created by the user, but cannot be sold online or offered for free. In some instances, a robot that is sold for profit is not legal and may be subject to penalty. This is especially the case for scams.
If someone is selling scam software, you should take action to report them to the necessary authorities to protect other traders.
If you acquire a Forex robot that normally requires a license but you have not paid for it, using that may be illegal as well. Watch out for people selling stolen versions of Forex robots, as the owners of the software may hold you liable for your use of the unlicensed software.
Forex Robot Costs
Forex robots come in a variety of different styles; therefore, they will come at a range of different price points. If you are in the market for a Forex robot, you have several pricing options depending on what you need.
A simple Forex robot could cost less than a hundred dollars, while more complex products may cost well into the thousands. It all depends on the capacity of the robot and how customized it is at the point of purchase. Some of them may be free and others offered on a subscription basis.
When evaluating Forex robots for purchase, be sure to watch out for scams. Don’t trust any product that guarantees specific outcomes or is being presented by an unreputable outlet. If it seems too good to be true, it is.
Is A Cheap Bot Worth It?
Cheaper Forex robots may be worth it in some select situations. For example, if you are only using the robot for basic interactions that don’t require much power, a cheap robot may be all that you need. Some robots may offer basic functionality and require additional input to use to their fullest capability.
If you have knowledge that can be used to improve upon the programming of your robot, a cheap alternative may be a good option for you as well. But—be careful when investing in low cost Forex robots. These robots may be scams that do not serve the intended purpose and may even have malicious activity built into them.
The Benefits of Expensive Forex Robots
Forex robots that are more complex may be easier to use or offer broader usability. The cost of your robot doesn’t necessarily dictate its quality, but high-quality solutions, such as enterprise level robots, often cost a significant amount. Sometimes they even range into the tens of thousands (however don’t expect to see costs that high if you are only purchasing for personal use).
For the average Forex user, that may seem a bit extreme, but the value of a Forex robot that cost several thousand dollars should not be underestimated. If used correctly, a well-crafted Forex robot may be a game changing factor that takes your return on investment to the next level. Custom Forex robots are more likely to be expensive, but if made with the correct specifications, they can pay for themselves over time.
Finding Forex Automated Trading Robots
Forex robots are not hard to come by. In fact, they are growing in popularity. If you want a Forex robot, you can find them easily online. This means you don’t have to just trust anyone’s word on whether or not they work. Many Forex robot providers will even allow you to back-test the robot using old price data to assess if the robot theoretically would have allowed you to turn a profit using your methods.
Before purchasing a Forex robot, be sure to do your research and shop around. Some of these robots offer different functionality, and you don’t want to settle on one that offers too little or too much functionality for an unaffordable price.
The best thing about Forex robots is that you do not need to be an expert coder to use them. However, if you do want a more complex, customized robot, then it certainly won’t hurt to know some programming skills.
Why Use Forex Trading Robots?
The best thing that a beginner can do with a Forex robot is automate the processes that they already rely on daily. If a trader finds themselves manually checking the same tasks on a frequent basis, there is no reason why they can’t set up a robot to automate that process for them. That can save them time in the long run and even allow them to catch trading opportunities that they otherwise may have missed.
The major benefit of a Forex robot is that it allows you to maximize your efficiency in gathering and acting upon information. With a Forex robot, you can execute trades without even being present or hiring another human worker. The end result all depends on the quality and customization of your Forex robot.
If you become adept at using a single Forex trading robot, you may be able to bolster your ROI even further by implementing several at once. Using a network of different Forex robots to achieve different objectives may allow you to reach new heights in your Forex trading career. Be careful though, you don’t want to risk costly errors as a result of incorrectly programming your robots. Be careful and pay attention to your efforts as you scale upwards.
Should You Use Free Automated Forex Trading Software?
Forex trading robots are normally somewhat complex, which means companies have to maintain them. In order to stay on top of their updates, they usually charge for the product. As with many premium products, there are often free versions available online. When it comes to Forex robots, there is no guarantee that expensive robots will be more effective than free ones.
Still, the fact that automated trading systems that are paid will have more funding to provide updates and improve existing features does make it likely that the paid products are more beneficial. Though, that doesn’t mean the free options should never be used.
For example, there are many free Expert Advisor programs available from MT4 and 5. These programs are not the most complex, but they can certainly help. There are further paid options available for those brokers, as well.
The more advanced options are more likely to make you more profitable, therefore it makes sense to invest in something more complex to get started. Still, the free versions may be good for test runs or beginners who want to gain a better understanding of how Forex robots work before investing too much.
How to Choose A Forex Robot
If you are shopping for a Forex robot, there are some key steps you should take to find the right one.
Consider your needs
Before you can select a Forex robot that works for you, you will need to understand exactly what you need the robot for. If you are only doing simple trades, you will need a simple robot, but if you are an experienced trader that carries out complex trading strategies, you will likely need a more sophisticated robot that can do more. To understand what you need in a Forex robot, consider your most common trades and assess your trading strategy.
Do Some Back Testing
Back-testing is the process of using a Forex robot to process historical data in order to determine if the robot would have led you to a profitable outcome. This testing method allows users to find out if a Forex robot would be useful for them, or if they should keep shopping. Backtesting your prospective Forex robots extensively is often advised, because before investing much time, effort, or money into a Forex robot, you should make sure that it is capable of providing you with the results you need.
Check the Latency
Latency can be a significant factor when trading internationally, as a difference of milliseconds can impact a trade noticeably. Therefore, a poor connection can cost you money if the system does not update quickly enough for your robot to make a necessary decision. Before setting up your Forex robot, ensure that it is equipped to cope with latency issues that you may need to combat in the future.
Address Security Concerns
Security should be a major concern when dealing with trading on the Forex market, as cybercrime and hacking are currently rampant issues. Just like any other digital product, Forex robots are able to be attacked or intruded by malicious internet users. Before installing one, be sure that the software was obtained from a trustworthy source and other security precautions are taken. In some instances, scams can even be perpetrated by the Forex robots themselves, so be extra cautious.
Fundamental Analysis and Forex Robots
Now that you know what to look for in a Forex robot, you should learn more about how to use one most effectively. First of all, take note that Forex robots are very good at operating within situations where the rules and conditions will result in a predictable outcome. They are highly effective at analyzing price charts and scanning historical data to come to relatively useful conclusions.
Still, there is one flaw to Forex robots.
They lack the logical capability to analyze external data and come to useful points. This is where humans come in. Only humans can assess geo-political events and other external information to make informed guesses about what will happen next in the market. This is outside of the capacity of a Forex robot, although some advanced systems are able to account for similar variables through a system of data harvesting. Still, they are not at human-level intelligence yet.
Some traders find this to be an issue as they rely highly on the intuition and instinct of human decision making to drive their trading ventures. Others are unbothered by the logical limitations of Forex robots, because they are able to program changes to the process that their robot will follow.
What Are Forex Expert Advisors?
An expert advisor sounds like a useful companion that will help you make important decisions. In the world of Forex, that is mostly true, except the companion isn’t a human being. Expert Advisors (EA) are actually software products that tell you when and how to make trades, or in some cases, the software can initiate and execute the trades themselves based on instructions you have entered into the system.
Expert Advisors are not available on all trading platforms, but they are commonly used on the MetaTrader 4 and MetaTrader 5 Forex trading platforms. If you are not happy with the functionality of an existing expert advisor, you can use the parameters of one to expand into a new custom EA. There are many advantages to EA’s, which we’ll discuss below.
Why Use Expert Advisors?
Forex markets are almost always open, therefore there is always an opportunity to make a profit on the market. Forex robots allow you to find trading opportunities when you are at work, when you are asleep, and any other time you are unable to manually trade. Expert advisors are effectively just highly refined Forex robots that will take the process by the wheel and remove emotion from trading. The EA will simply respond to your instructions and carry them out without emotional input.
Having an EA can help you lower the amount of stress involved in Forex trading, allowing you to conserve energy for when you need it. The ability to cross compare several currencies and associated factors instantly is an invaluable tool that will make you a much better trader. Regardless of if you prefer the old-fashioned manual trading approach, you cannot deny that EAs and robots can have some advantages.
Here is a quick list of EA benefits:
- Spend less time trading
- Limit emotional input with trading
- Use on any MT4 market
- Back-test EAs before using them in real world situations
Downsides of Forex Expert Advisors
Although there are many benefits to EA use, there are some downsides to the useful software. For example, in instances where a real-time situation has a significant impact on the market, your EA will be unable to adjust based on those outcomes. If there is a disaster that lowers the value of an asset you were looking to enter on, your EA may automate a trade that costs you greatly, while someone at their desk would have been able to prevent such an outcome.
Similarly, an EA may have the versatility to process a massive number of variables at once, but it can only go as far as you program it to. The quality of your EA may limit you significantly. They are rigid when working with variables that fall outside of the parameters you set. The robot may work well, but it can only work with what you give it.
Finding an Expert Advisor
Not all Forex expert advisors are the same and, in most cases, they can be highly customized. If someone is offering you their expert advisor setup, don’t automatically agree to use it. The key to finding a good expert advisor is to test and research as many as possible. Even if you think you have one that fits your needs, test it more! The reliability of your EA is crucial and you should do everything in your power to ensure that it performs well for you.
If you need to make tweaks to your EA before putting it to work, do it. The faster you find the right configuration the easier it will be to trade. Sometimes firms will offer a public EA, or you can get access to one from another individual, but the quality of their EAs can vary naturally. Beware of scammers when it comes to this, especially when they promise high returns if you purchase or use their EA. Always seek a balance between trustworthiness and reliability when in the market for EAs.
Types of Forex Trading Software
Forex trading software and Forex robots are effectively synonymous. When it comes to fully automated trading systems, there are three most common types. They are as follows:
With copy trading software, the trader should have specific needs. Normally the intent for using one of these robots is to copy their most common trades to ensure that they don’t miss them in the future. With copy trading, the user can select an account, that doesn’t have to be their own, and copy their most common trades. This can be useful for setting up multiple accounts under the same firm, or for just tracking the trades of another individual whose judgement you trust.
In many cases, you can find public lists of investors who advise you to copy their trades. Watch out for scams though, sometimes traders will attempt to persuade people for malicious reasons. Check out popular Forex trading sites to learn more about copy traders that you can trust.
Broker-Based Automated Trading Platforms
Some trading platforms are equipped with broker-based robots. These software systems offer users a variety of automated features, allowing them to customize their trading process without using 3rd-party software. This is important to many traders, and can even influence the choice that traders make for their broker. It may be beneficial to only work with brokers that support the most common automation platforms.
A lot of traders use trading signals to improve their trades. The signals are used to enter a trade on a currency pair at a set time and rate, and the process is handled by either a Forex robot or a human user. The purpose of the signals is to keep traders alert allowing them to maximize their profit and keep track of their trades. In many cases, providers who offer trading signals may also offer consulting. Before working with a Forex consultant, always check their background to ensure that they are professional and not trying to take advantage of you.
Forex signal providers may also offer account management, which can be useful as it removes a lot of the hands-on management of the funds. Though there is risk present as they are not fully liable for losses. Weigh the pros and cons of a Forex signal supplier before working with one.
Trying Out A Forex Robot
Forex robots are a great tool that can be used to the benefit of traders across the world. The people who choose to take advantage of them should be wary of the quality of the robot and ensure that they do their research before getting too involved with it. If things turn out to be a good fit, they can continue to customize the robot to work in their favor.
Don’t be too quick when choosing a robot for your trading firm. Remember that what the robot will be capable of depends on the logic, rules, and conditions entered into it. Don’t expect your robot to automatically make profit for you. It can be a beneficial tool, but remember you will still be responsible at the end of the day.