The use of robots in Forex trading is gaining tremendous popularity among investors. But what exactly is a Forex robot?
A Forex robot is simply a Forex trading software program that automates trading decisions based on a set of Forex trading signals which are preset to buy or sell a currency pair at a particular time. Robots are referred to as EAs or expert advisers and they can be set to do any function you want including signaling you to place a trade as well as actually placing and managing the trade for you automatically. The main goal of Forex robots is to remove the psychological element of trading.
A Forex robot will always follow your directions. It won't allow emotion into the trading process so you won’t be inclined to close the trade because it feels like it was opened too soon or too late. It plays by the rules you set no matter what the conditions or status of the markets are.
Since the most popular trading platform today is the MetaTrader, it follows that the choice of Forex robots is the one that runs on MetaTrader but it is always worth researching the industry before settling on any one program.
Forex Robots Trade While You Sleep
Forex robots stay on until you turn them off. You could be sleeping or just enjoying time with your family. The robot will keep an eye on the market and trade according to the rules that you set.
If you have a Forex strategy that is strictly mechanical and doesn't require a human in the decision making process, you can program your own Forex robot to trade for you 24 hours a day.
There are advantages to using Forex robots. However, a Forex robot should be used only as a part of your overall trading plan . The right robot, used correctly, can add some padding to your bottom line but to be a successful Forex trader you should be able to employ other trading strategies. Depending on your inclination, you should understand the importance of technical analysis and fundamental analysis and be able to depend on this knowledge in order to reach the right trading conclusions.
A good way to approach the situation is to consider robots as your computer backup, as just one means to a profitable trade. But you must also depend on your own smarts in order to make the right decisions. The more input you make, the better your trades. And besides, as advanced as technology is today, it is certainly not full proof and it would be folly to depend exclusively on computer gadgets. Glitches happen, data is lost, internet programs falter and all of a sudden you are left to your own devices. Without the confidence to make your own decisions, you will be left totally in doubt as to what to do.
So yes, use robots as a way of automating your trading. It certainly makes life easier. But don’t depend on it as the only means to successful trading.