There are over $ 3 trillion dollars transacted daily in the Forex market. One may think that the chances of getting a huge profit should be pretty high. But studies have shown that about 5% of the traders are actually making significant & consistent profit. This means that naive traders with no knowledge of Forex market and gamblers will find it tough to survive here. So where do Forex robots (Expert Advisor) come in? Are these robots capable of bringing the huge profits it so claimed? First, we need to look at the pros and cons of using such an automated system in the Forex market.
1. The robot needs to run on a computer or a VPS (Virtual Private Server) 24 hrs a day in order for it to perform properly.
2. Most software work best on brokerage firm that can offer currency pairs with tight spread. Therefore, it may not be suitable to run on every Forex account on Metatrader trading platform. This may limit your elearning opportunities.
3. Most of the software is written specifically for one currency pair only, although there is some that could run on multi-courses pair. Reason is because there is no single mathematical formula that works best for every currency pair.
4. Manual intervention of the robot during trading may cause it to malfunction and turn into losing trades.
5. Most robots do not trade on days of high volatility.
6. The robot does not have the data that are non-programmable. Here, a trader must always look at the bigger picture. Important Forex fundamental data such as economic news and political environment may affect the Forex market.
7. Newcomers may use Forex robot for the wrong reason. They may think that because it is an automated trading system since there is no need for them to know anything about the Forex market at all.
1. Forex robot can trade for you 24 hrs per day without food or sleep.
2. It free up your time to do other stuff instead of you looking at the computer screen all day.
3. The robot operates on a set of instruction. There is no greed or fear like a human do.
4. Most robots come with parameters that you can configure and fine tune.
5. Forex Robots is able to do data analysis quickly and effectively.
6. New traders do not need to have in-depth knowledge of Forex market but some basic knowledge of the Forex market is required.
7. Most robot developer offer help support and also 60 days money back guarantee of their software if you are not satisfied.
8. The expert advisor has a plan and is consistent in carrying it out.
9. A few Forex robots can monitor many currency pairs at the same time, giving you many more trading opportunities than the manual trading.
10. Automated trading is a lot easier as the robot has taken over most of the tasks of the manual trader does.
In summary, Forex robots can perform trades with greater accuracy and work for you 24 hrs a day. They can trade for you even in your absence. Almost all robots allow you to perform back testing to prove that they really do work. They help to save you time so that you can do other important stuff like improving your skills further. On the other hand, although Forex robots can help you find winning trades, but they do come with some risks and short-comings. Most of these robots are optimized on a particular currency pair. If you need to trade more currency pairs you have to buy additional robots. Trader must also look at the bigger picture such as the fundamental data and news that may affect the Forex market.
Undoubtly, Forex robots are definitely getting more popular in the Forex market. Thus the probability of finding the right robot becomes more difficult but it is not impossible. As mentioned, there are pros and cons in using Forex robot, individuals should choose carefully. These will ensure that you will continue to enjoy trading the Forex market.