The Holy Grail of Trading Systems or Just a Scam? Read about Forex Robots and Then Decide

Top 3 Forex Brokers

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Top 3 Forex Brokers

*Not valid for EU traders, T&C apply
There’s a new kid on the block in the world of Forex trading and it is one of the reasons Forex trading has become so popular. Automated Forex trading or Forex bots allow a trader to sit back and relax while something else does all the legwork on their behalf. Many of these automated trading systems promise big bucks and very little effort on the part of the trader, but many see them as just a lazy way of trading. Forex robots are simply a software application that is designed to perform trades in the Forex market by way of computer automation. But are they all they claim to be or should you proceed to use them with caution? Let’s give you all the necessary information and you can decide for yourself.

What are Forex robots and how do they work?

A common goal for many Forex traders is to make pots of money without having to lift a finger or sit for hours at a computer. Automated trading must seem like the perfect idea because it finds a good currency pair in the right time frame and initiates an order in order to maximize profits. At least this is what the developers claim when you read many of their advertisements and online reviews. A Forex bot is able to scan countless charts and watch numerous currency movements all at the same time, which is something we humans aren’t at all capable of. So there are obviously some things a trading robot can do better than us. And that’s not all they do much better. Robots are programmed with a set of parameters to enable them to make trading decisions, without any emotion to get in the way.
An automated Forex trading system makes use of its analytical abilities to look at the past performance of various currency pairs. It will consider both long and short-term performance as well as look for trends that may have occurred on a number of occasions during the time the currency pairs have been traded. Both troughs and peaks in value will be looked for, as well as recurring events that have aided in the rise and fall of the currency. With all this knowledge the Forex bot is able to place trades based on a currency’s past performance. But really this is exactly what a shrewd Forex trader does every day of the trading week. However, we appreciate that not everyone has the knowledge or indeed the time. Which is why many modern traders are looking for the best Forex robots.

Do Forex robots seem like the answer to your prayers?

Forex robots tips
Many of you reading about Forex robots will be convinced they are the best thing since sliced bread. Even if you discount some of the outrageous claims made by some of the developers. And we have to agree they can be of great benefit, especially for the novice trader. However, there is a downside. And it’s only fair we bring it to your attention.
The way in which a Forex robot analyses various currency pairs and bases its decision on events in a currency’s past can often produce very positive results. Thousands of traders have used Forex robots and made some significant increases in their account values. But, and it’s a big but! Automated Forex trading systems aren’t foolproof. Quite simply because there is no guarantee that market conditions will stay the same as they always have. World economies aren’t as black and white as a computer system thinks they are. They are dynamic and human and things can happen that nobody had dreamt of before. This means there will be events that happen outside the robot’s reality, ones the robot just isn’t prepared for. All of which can throw the computer’s system completely off balance and damage an otherwise perfect strategy. The human element of the market doesn’t feature in any graphs of past performance and it’s something a computer program won’t understand.

For every series of profitable trades, there will be one that has the potential to throw everything into the red as the result of one unpredicted event. Imagine there is a political announcement in a country that causes a small dip in the currency value. This could potentially break the software’s lock on small up and down market trends and completely ruin the trading plan. It could also cause the trader taking the robot’s advice to lose all their money.
Is there a solution to this problem? Yes, there is, but some of you may not like it. The answer is to accept the analytical power of a Forex robot and to pair it with the power of a savvy trader who is in tune with global currency markets and can monitor what the robot is doing and together produce positive results. Which means you’re going to have to put your thinking cap on and start watching and analyzing the markets as well.

The benefits of using an automated Forex trading system

You’ll get no argument from us if you ask whether there is a place in the world for the best Forex robots. They bring a number of benefits including:
Maintain a level of consistency – Using an automated trading system will help a trader to stay focused and be more disciplined.
Response times will be quicker – A computer program is able to analyze data and respond much quicker than the human mind. And in the world of Forex trading, this is important as currency values can change in a few seconds.
Human emotion is removed – Emotions can be very difficult to overcome for a trader, especially in the beginning. An automated trading system executes orders providing a number of criteria are met and won’t be swayed by a run of previous losses, or because it’s having a bad day.
Forex bots are experts at multitasking – The human mind, unfortunately, has its limitations but not so with a computer. An automated trading system will allow a trader to trade a number of different strategies across a number of different accounts. This can be of benefit because it allows a trader to spread the risk over a number of different instruments and also gives them the opportunity to hedge against possible losing positions.
If you like the idea of using this type of system but don’t know how to find one here are a few tips.

How to pick the best Forex robots

When looking for a suitable automated Forex trading system there are a number of factors it will be important to consider.

We hope that you can now see both sides of the argument and are in a much better position to decide for yourself. As we’ve already said there is nothing inherently wrong with using a Forex robot but you should do so with caution. Don’t let a piece of software make all the decisions because this means you’ll never learn. And at the end of the day, it is going to take all the fun and enjoyment out of this form of investment. logo