So, who is a Forex Robot?
Forex is a huge trading platform working 24/5 with trading going on non-stop. Once you are a trader you come to a point where you understand you just can’t be trading as fast and as much as you would like to simply because of physical time, fatigue and your life apart from forex.
Technology came in to rescue and here we go: meet a forex robot. Who is this? What does it do?
Well, Forex Robot is an algorithm of certain actions that are programmed to perform trading – to open and close deals according to the preset parameters. In simple words, a trader sets up its robot to do the trading automatically. You can have a look at it here: https://en.wikipedia.org/wiki/Automated_trading_system
Think about it as a type of an artificial intelligence that actually works for you.
There are many tech companies programming and creating forex robots with their own algorithms and there are certain types of forex robots. Do not forget that forex market is a volatile one so the most popular type of robots would be so-called scalping robots.
But usually new or inexperienced traders instead of analyzing the needs, the market, different types of robots and the algorithms behind them, just try to search “a best forex robot”. Or a “free forex robot”. I would prefer to have a deeper look at what and how the robots are built.
So, what do you take into consideration when choosing a forex robot?
Type of deals – scalping, day trading or position trading
- Algorithm of the dealing – a set of indicators or trader system (platform)
- Parameters of maximum drawdown set in the algorithm
- Mathematical expectations of robot performance
- Volume of trading
Clear, that your choice of a robot would play crucial role in your performance as a trader and the return of the investment.
So, we come to a point where it is highly important for a trader to pick the right robot. You need to understand that picking the wrong one is not only spending money but also ineffective trading in the future. Funds loss. Simple as that.
How do you choose the right one?
There are a few things to consider:
Before you buy a robot have a look at its financial trading data. Pay attention to the statistics of the trading deals, drawdown, recovery factor and profit factor. Positive indicators would mean bigger chance for successful trading.
- The option to optimize a robot. Forex is an ever-changing market and currency pairs do change their trends, so your robot should adjust to the trends and optimize itself to the market conditions.
- Have a look at the current performance of a robot for other clients. Read reviews on profitability and only then decide which one is best for you.
Mind you, once you are set up and trading and are happy with your robot doing the job you will have time for a closer look at the market and analyze your next moves, trends, etc. Currently around 80% of all trading is done by forex robots.
I have known the cases when traders got so experienced with different forex robots and their performance that they felt confident enough to employ a forex tech company producing robots and have their custom-made robot tailored and coded specifically for their needs.
Every trader has its own methods of market analysis and trading parameters so effectively trading is an algorithm of certain actions and decisions that you would like your robot to perform. When you are a newcomer, do your homework, analyze, read the reviews, see the stats, get two or three different robots, try them in a real-life trading and once you know what you are doing you can have your own robot designed and coded for you. Major hedge funds and big traders do have serious robots in their arsenal that demonstrate 1000% profitability per annum.
There are most common types of robots:
From the types of robots, we understand that they correspond to different strategies of trading, based on different parameters. So, your first step of learning about who a forex robot is and what it can do is to start reading the forex robot reviews.