In this article, we will examine advantages and disadvantages of using a Forex robot but first let’s quickly understand what Robots are. A Forex robot, in layman language, is a software that reads the steps of your trading algorithm, analyses the markets on your parameters and automatically places a trade on your behalf onto your broker platform.
All in all, a Forex robot does precisely what you would do in the markets if you were to manually login, read the markets and place your trades. Given the rules of perfect trade opportunities and clearly-defined principles of risk-management/position-sizing, these robots can easily eliminate the possibility of making a human error in your trading judgment.
A successful trader knows how much of hard-work and commitment is required in identifying each profitable trade and then converting it to profits. This hard work, at a certain stage, tends to test your patience and changes your mind on your rules, hence bringing in losses. Thankfully, brokers now allow us the use of robots for automated trading and what more can you ask for that the broker itself facilitates you with the coding-language required to write these robots. These Forex robot are written in a very popular language ‘Meta-quote’ available on your meta-trader platform where the script of the robot can easily be loaded onto your platform. After this, it is this robot that will take your place as a trader and handle your account for you as per your rules, as long as you want. So your Job in the end is to only keep opening new accounts, feed some money in it, load your robots and leave the rest to your robot intelligence. Once you have a Robot, the only requirement would to be to keep your computer switched on all the time but now-a-days, even that’s not critical.
Of course, you always want to keep experimenting new systems that you make but do not feel like testing the old-charts to see the applicability of these new systems. A robot does this job for you where you just need to indicate an old date and the robot will back-test with the retrospective effect. A powerful Forex robot has the potential to scan even one-hundred years old data in less than just an hour and can present a detailed report on your system-performance and potential success of it. What more that the robot can also easily optimize your system based on its maximum possible draw-downs, average-wins and average-losses and suggest you the ‘even-better’ rules. So if we were to compare, we would easily find that the advantages of using a robot are much more than its disadvantages. However the condition that’s paramount for this set up’s success is that your robot is your own brainchild.
A lot of companies and individuals are seen luring the beginners with their so called ‘unbelievable’, unimaginable, killer Forex robot that can trade for them for a very cheap price. Gullible people tend to experiment with these fake robots and end up with huge-losses in their accounts. It’s important that if you wish to automate your trading, you write your own algorithm and then have it converted to a robot with the help of a programmer. In this competitive era, the programmers can make the robot for you at dirt-cheap prices and in the end what you get is your own robot, with your own rules, your intelligence and your own abilities. Of course there’s the risk of losing your intellectual property when you share your system with a programmer and then finally with the broker as good systems spread like crazy. Most of the traders are possessive about their systems, but for a second if you could leave that selfish thought behind, you will see that the whole essence of forex trading is ‘ finding financial independence’ which is not so literal as long as you are physically involved with daily markets. It’s only the ownership and use of your own Forex robot that makes you a complete trader and a fully independent individual. To achieve that super-exclusive freedom, if it demands certain sharing and compromises on your intellectual property, then be it.