What’s the first thing that comes to your mind when you hear the word “forex robot”?
Maybe it’s something of a sci-fi movie, or is it something that makes money for you while you sleep on your couch.
Let’s try to find out what exactly a forex robot is, how it works, and the pros and cons of using a forex robot.
What is a forex robot?
A forex trading robot is computer software that uses a sequence of forex trading signals to help you decide whether to buy or sell a currency pair at any particular time.
The majority of these robots are created using MetaTrader and the MQL scripting language, allowing traders to produce trading signals, place orders, and manage trades.
The forex robot operates automatically with the press of a button, making trades based on mathematical calculations applied to historical data.
In other words, whether or not you are in front of the computer, they automate the process.
How do forex robots work?
Forex bots can scan a large number of charts in a way that humans cannot. Also, they are designed with specific parameters required in making trade judgments. They evaluate when it is suitable to trade or not trade using implanted trading signals.
This is why many traders are drawn to them: they appear to be something you can turn on, walk away from, and profit from while sleeping on a beach.
Pros of using a forex robot
- When you use a robot, it executes your trades and even manages your account for you, so you don’t have to do anything. In principle, you don’t even need to know anything about the forex market because the robot can detect short-term trends and opportunities across all major currencies on its own.
- When the markets are open, a robot can trade constantly. It never gets weary of thinking and never needs to rest. It is nearly impossible for any human being to maintain this schedule without taking a break.
- A robot can manage various forex trading accounts at the same time. This helps you to diversify your capital rather than putting it all on a single method.
- Using an automated trading system to split your funds could help you boost your trading potential.
- All of the robot’s decisions are based on real-time information and patterns. It is not inhibited by human emotions, which could incorrectly impact your decisions.
The advantages sound fantastic, and yet robots have some drawbacks. Let’s look at some of the cons.
Cons of using a forex robot
- You must have your computer active and linked to the internet 24 hours a day, seven days a week, making it vulnerable to viral attacks.
- Some brokerage firms do not allow robots to trade, which can limit your options.
- Configuring the robot to execute at optimal efficiency is difficult, and while adjusting it to work to the best of its abilities, you may accidentally cause it to malfunction, which might be a costly error.
- For all of its flexibility, a robot can only work within the parameters that you have set. If an external force interrupts the trends, the robot will be unable to pick them up and may end up executing a losing trade.
Bottom line
Forex robots are a great tool to add to your arsenal. They analyze historical price movements to give you exact entry and exit points.
Feel free to give the forex robot a shot, as it can take all your trading workload.