The Role of Robots in Forex

Many persons use these programs because they offer great convenience to the trader and help him save time, while generating profits. Compared with the work implied by trading manually the account, it would appear that using these robots is more beneficial. Of course, this will be true if the trader learns to use it and generates profits in the same way he would be doing it by trading manually.

Another important aspect is the psychological part. Many use robots, to help them respect the rules at 100 %, because they feel that operating manually can interfere in a strategy (especially because of the emotions involved) which would prevent it from working correctly. For example, cutting profits before it is time or allowing losses to run by increasing stop-loss boundaries.

You also need to make sure that you learn thoroughly how the automated system that you buy works, since not all of them work in the same way and the configuration procedures to make them function on your computer can be quite variable. You should learn to trade your own account in the first place and build up your own business, as you must start from the basic phases to be able to master the behavior of the market and later on be able to evaluate if it is worth while or not to get a robot to trade for you. The essential thing is that you initially learn to perform trades on your own, because you cannot entrust all your capital to a robot that might fail at any moment and lose all your money.

It is better that you take responsibility for your profits and losses, than leave this to a robot and later on blame it for its mistakes.

The next step would be to complement your own trading with a robot, but not using it exclusively for all your transactions.

There are hundreds of options on the market, even robots that promise you an extraordinary income, but if this was so simple, all traders would simply buy a robot and start generating millions of dollars. This does not mean that robots do not work, but you need to be conscious that this is not an easy task and that you need to realize a previous research, while learning thoroughly both about the market behavior and about the specific functioning of the robot that you have decided to use.

There have been documented cases of very effective robots that generate money steadily, but after times of a high volatile nature or when they have been changes, for example, in daily ranges, they stop working and since the majority of robots have a quite scary risk/reward ratio (sometimes up to 40:1), developers say that the robot compensates this with its high level of positive trades and a low stop-loss in terms of pips. Nevertheless, in a continued losing streak period they can drastically fail and wipe out your whole account.

Another important topic to consider is the technical support offered by the developer of the robot. It is important to see if this company or person realizes continued updates to his robot in order to adapt it to market changes. The majority of developers seem to believe that they sell a robot and then never again will they have to make adjustments or improvements, so please be careful.

Finally, although there are ways to hide robots so that the brokers do not know that the trader is using one, the real scenario is that many brokers possibly are aware of their use and sometimes they block the robots (especially the most profitable ones), which then makes their use ineffective.