Forex trading robot, forex robot, forex ea, or expert advisors are terms used interchangeably, usually to describe software that can trade forex with little or no human intervention.
It’s a popular fact that the forex market is a trillion dollars market, but this fact works in two ways for me and you;
It’s either you lose money to this market or you take money from it.
With advancements in technology, especially the advent of computers, the Internet, and artificial intelligence, a group of software programs called forex trading robots emerged to help traders make profitable trading decisions.
This then means that; traders do not necessarily need to sit in front of their PC 24/7 to monitor the market for trading opportunities. You could be sleeping while your forex robot makes money for you.
Mind you, while forex robots can make you money, they can also make you hefty losses; it’s a two-edged sword; be careful so you don’t cut yourself.
Before I delve into how you can use a forex trading robot to your success; Let’s take a look at the background.
Algorithmic Trading Explained
An algorithm is a principle, mathematical formula, or mechanism on which a computer software works. It’s a set of instructions or directions for solving a problem.
Algorithmic trading then describes a method of trading that involves a set of directions and instructions which are usually automated and programmed into a forex robot or expert advisor.
Two Types Of Forex Robot
Basically, there are two types of trading robots;
- Fully automated Forex Robot
- Semi-automated forex robot
Fully-Automated Trading Bot
This kind of trading robot will not require any human intervention to make trades. It has an inbuilt algorithm or trading strategy that it uses to carry out its job.
This is a set-and-forget kind of trading bot.
It performs major trading functions such as
- Scouting entry and exit points of trades
- Placing the trades
- Closing the trades
- Setting stop losses and take profits
One can deduce that such a system will surely eliminate the emotions that come with trading the forex market.
It also saves time and increases speed cos it could spot many trading opportunities that one would have missed on a given day.
Semi-Automated Trading Robots
As the name goes, this kind of forex trading robot is not fully automated, which means you as a trader would be the one to place trades by yourself.
Most times, this kind of robot trading software is used to send like a signal to traders, where traders are charged with making the final decision of placing the trades.
It uses a preset algorithm or strategy to decide entry prices, stop-loss, and take-profit positions
and that is where its function stops. The trader is then meant to use the information supplied by this robot to enter a trade.
This kind of system is more suited to traders that have time to trade the market on their own.
Technically speaking; this kind of forex robot is safer than the automated bot.
Pros and Cons of A Forex Robot; Money Maker or Wealth Crasher?
Yes, a forex trading bot simplifies forex trading even for a novice trader, but if not careful, you could be losing a fortune.
There are stories of traders that crashed $100,000 in one-day trading with a forex robot.
There are also stories of traders that made a fortune trading with a forex robot.
A good tool in the wrong hands will do no good. While a wrong tool in the right hands will not perform its functions properly.
From my own experience of creating and using forex robots for the past few years, I know the advantages and disadvantages of using a forex robot or expert advisor.
Advantages of a Forex Trading Robot
- Simplicity for beginners: Not everyone has the time to take a course in forex trading and start learning strange terms like Parabolic Sar and Bollinger bands not to talk about reading charts that most times look very complicated. But with a forex robot, beginners can now make money from forex trading without even knowing how to trade forex at all.
- Time Savings: Full-time forex trading is time expensive. You need to sit in front of your PC 24/7 so you don’t miss a sweet trading opportunity. With a forex bot, you do not need to sit in front of a PC for time eternity.
- Forex Bots are smart and sophisticated: Imagine having to combine so many forex indicators, time frames, and so on before placing your trades? It’s a lot of work. But with a well-programmed forex robot, trading becomes seamless and easy.
- Backtesting Becomes Easy: backtesting simply means testing a forex strategy using previous market situations/data so as determine its performance. This process is very tedious if you have to do it manually. But when it comes to a forex robot, it gets very easy cos you are working with the software.
- Making Money Becomes Easy:
Disadvantages of Robot Trading
- Easy To Lose Money: One of the biggest advantages of using a forex robot is how it quadruples your money-making opportunities. On the other hand, the biggest disadvantage is how you could easily lose all your money. While this depends on the kind of forex robot that you are using, I can say from experience that 90% of forex trading robots and expert advisors do not deliver profits.
- Need For Strong Constant Internet Connection: For you to operate a forex robot, your computer must be powered and connected to the internet 24hours a day. Thankfully this problem is completely eliminated by a virtual private server (VPS). I will create another guide on how to use a VPS later on.
- Poor Response to Fundamental Data: Expert advisors are usually prone to losses when their is a NEWS release. While I have seen a few robots that have been designed to respect NEWS release in the market, most bots fail woefully in attending to this issue.
- Lack of Flexibility: A robot would never beat the human brain and judgement. In the case of forex robots, its functions are already pre-designed in such a way that it can not handle worst case scenerios where an individual would have taken another trading action. Forex robots trade based on a pre-programmed algrothm, therefore, anything beyond that algorithm could be danger. Its important that I mention that still, there are forex robots that are well designed, programmed and has some artficial intelligence.
- Problem of Scam: Over the years, I have created a lot trading systems and from experience, very few trading systems out there deliver real pips and profits. If you search around the internet, you are going to find thousands of forex robots. The truth is, 90% if this stuffs do not work. Scammers are out there bastardizing this niche with crap trading systems. My only advice here is; be careful.
Are Forex Robots Legal?
Why not? Forex robots are very legal.
To confirm this, almost all retail brokers allow forex traders to attach forex robots of their choice into their MT4 or MT5 Platforms.
but be careful here: because it’s legal doesn’t mean you are going to be successful in using them. Do not also forget the fact that most trading robots are created by scammers using all forms of deceptive marketing tactics to trick you into buying such systems.
While it’s not illegal to use a forex robot, it doesn’t mean all forex robots are legitimate.
You need to shine your eyes as they say where I am from. Scammers are on the hunt and forex robots are not regulated by any professional or regulatory body.
Be warned, and be scared, especially when you see a robot that promises heaven in earthAlex
Do Forex Robots Work – Autopilot?
Yes, they do, but honestly, I think the question should be; do forex robots make money? are they profitable?. Yes, they can be profitable, depending on the one you have decided to use.
The truth once again is that the forex robot is not the problem but the strategy, I mean the algorithm that it executes.
Therefore, to answer this question; we must ask; are there profitable forex trading strategies out there? Yes, there are and this gives a case for the existence of profitable forex auto bots.
The profitability of a forex robot depends solely on the profitability of the underlying strategies and algorithm.ALEX
2 Examples of Forex Robot
Examples of forex robots that I have reviewed in the past include; GPS forex robot, Fxstabilizer, Renko forex ea, Odin Forex Robot, and many more.
While I have reviewed lots of forex trading robots in the past, I will use the forex trading robots on this website as an example as I do not have any control over other expert advisors outside this website.
1. The Profit Forex Robot
I created this forex robot for-profit lovers like me. Meanwhile, this is forex trading and I will respect myself by not making stupid claims about what you can achieve with this robot.
2. The News Deactivator and Activator EA
As explained in this article, most forex robots are prone to disasters during NEWS release.
Therefore I developed this News Deactivator and Activator EA to Deactivate all the forex robots on your chart when there’s a NEWS release.
It will then activate the robots after the NEWS release.
This is a useful tool if you are going to avoid stupid losses while using forex robots to trade.
Meanwhile, as a good news to all my readers; I will be releasing various forex tools and robots on here every 2 weeks. make sure you keep checking the Tools Area.ALEX
Things To Consider Before Buying or Using Any Forex Robot To Prevent Scam
While I have created a full step by step guide on what to consider before buying a forex robot; I have done a summary below
- Is There A Real Person or Persons Behind The Robot?
- Check for a Live Account Proof
- Be Skeptical When It Is Too Good To Be True
- Test Test Test
- Consider the Pricing
- Verify or Undertstand the Underlying Strategy or Algorithm
How To Create Your Own Forex Robot
While I would love to create a separate article on this topic; here’s a summary of how you can create your own forex trading robot.
- Determine your strategy and approach
- Try it manually (Forward test the strategy)
- Paper Trade (Back test manually)
- Now turn your trading idea into a robot or semi-robot
1. Decide or Create Your Strategy
Your strategy will be used to create an algorithm for your robot. Your strategy could be anything. Could be price action, reversal, trend, or some combinations of indicators, candlestick movements, or time frames. Just have a strategy that you want to turn into an indicator.
2. Test Your Strategy
It makes sense that you have tried and tested the strategy that you just created.
After all, the success of your forex robot or expert advisor is directly proportional to the success of your strategy or strategies.
Therefore, you need to have tested your strategy to make sure that it’s profitable before you proceed.
3. Hire Me to Program or Automate Your Robot (Winks)
Yeah, you heard that right. That’s my job. I have coded not less than 500 forex robots, expert advisors, and indicators in the past. Sincerely, that’s me not exaggerating.
If you want to learn how to do this on your own; I am working on a course that will teach you this stuffs already. Stay tuned.
4. Backtest Your Robot
Do not forget that the success of your forex robot would depend on your strategy.
Therefore after you have got your forex trading robot in your hand; Its only right that you test the robot using available market data.
This will help you determine if your forex robot will be profitable.
Difference Between Forex Robot and Expert Advisors
You must have noticed that I have used the terms forex trading robot and expert advisor interchangeably in this guide.
Expert advisors don’t really trade for you on autopilot; they only suggest or advise the best entry or closing points. On the other hand, trading robots do all the jobs on autopilot without any human intervention.
These days, terms like forex ea, expert advisor, forex robot ea, forex robot, and trading bots mean absolutely the same thing.
Summary – Forex Robots and Expert Advisors
forex robots and expert advisors are tools that are revolutionizing how we trade in this era.
While it’s a tool everyone should consider, it’s also important to be aware of the risks that could be involved if you use a crap forex robot.
One last piece of advice; you should test any forex robot before you put it on your live account.
So, Over to you, what’s your experience with forex robots? kindly share in the comment box below.