A Forex trading robot is a computer program that uses various forex trading signals to determine whether to buy or sell a particular currency pair at any particular time. The purpose behind them is to remove the psychological element of trading. Is that a good thing or a bad thing? We’ll let you decide after providing you with all the relevant details.
What does a Forex Robot do?
In order to maximize profits, traders have to keep a close eye on the currency market, as well as keep up to date with the latest financial and world news. Many traders don’t have the time or inclination to spend hours sat at the computer, which is why Forex robots are becoming very popular. And who wouldn’t want to take advantage of a system that can do it all for you, while you get on with your normal life. Robots are able to scan numerous charts and watch movements far quicker and more efficiently than a mere human. The robots also have programmed parameters, so they can decide when and when not to buy, without the worry of human emotion.
Some of the programs are able to find profitable trades in the most erratic markets. The trending direction may be unclear, but following the best one will maximize profit and reduce the chance of a loss.
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Are Forex robots the Holy Grail of trading systems?
Traders can buy Forex trading robots on the internet, but it’s worth remembering that there is no strategy, system, or way of playing the market, that is guaranteed to be 100% effective. And that goes for automated systems, or those that use the power of the human mind. Why would anybody sell the perfect money maker system? Some of the big financial firms keep their trading programs under lock and key.
Forex robots make big promises, but it’s worth pointing out they aren’t all they’re cracked up to be. The US Federal Government claims that a large majority of them are in fact scams. You’ll also be hard pressed to find any articles from news and financial sources that promote them. We’ve taken a look at many of the online robots merchants and it seems that many promote their own products by bad-mouthing the competition. And many of the advertising claims of people who have made heaps of money are actually fake.
How to pick the best Forex robots
If you want to gain an understanding of the benefits of Forex robots, spend some time reading genuine customer reviews online. Yes, they can scan millions of charts in just a few seconds, but a high percentage of them churn out incorrect information. They are only robots after all. And robots can only perform as well as their program, and they don’t have the ability to think creatively. Their functionality is limited to past performance and how they have been programmed.
We’d advise traders not to depend on one entirely for conducting all trading activity. Trading requires a high level of human observation and research. Humans are also much better at following economic conditions and keeping up to date with financial news. Robots usually pick out positive trends and trading signals. However, functionality can be hampered by jittery trends or incorrect information. There is also the risk of hackers and viruses messing up the plan.
If robots made it easy to make money trading Forex everyone would be jumping on the bandwagon, and nobody would need to go to work. We agree that a robot can make money, but it is usually for a limited time. Before long it will start losing money and you may even find your account being completely wiped out.
Forex trading requires more than an automated system
To be successful in the market of Forex trading requires more than a little good luck. The most successful Forex traders will have skill and knowledge, visually and analytically. Trading in the financial markets requires practice and is considered by many to be an art. Markets conditions change continuously and only an experienced trader can anticipate when to enter a market and when to steer clear.
We’re not saying you shouldn’t spend your money on robots or automated software, because at the end of the day the decision is yours. However, we would recommend you consider it very carefully, weighing up all the pros and cons. And spend some of your time and money learning about the different trading systems and possibly trying them out with a demo account, before trading for real money.
Robots are a tool for lazy traders, and surely they’re going to take all the fun out of trading? But promises of big profits with little or no effort – what isn’t there to like about that? All we can say is be careful and find out as much as you can before spending your cash. And remember that there is far more enjoyment to be had from trading in the Forex markets than pressing a few buttons and letting a piece of software do all the work.