For the uninitiated, a forex robots (also known as an Expert Advisor, or EA) isn’t as fancy as it sounds. When I first heard the term I had visions of an intelligent machine capable of outsmarting my Roomba at a game of chinese checkers. But… it’s not.
Forex robots are just a piece of trading software that trades automatically based on a set of preset conditions and trading strategies. And, even though many forex robots were developed with the goal of deceiving traders, some of these forex trading robots that trade automatically can actually generate profitable trading.
How Do Forex Robots Work?
Let me put that into context for you. If we were to create a basic technical trading strategy using the Relative Strength Indicator (RSI). Say, we enter currency pair trades into the trading system every time RSI oversold or overbought on a particular chart. Hence, every time RSI hits a particular number we want to buy or sell and set an accompanying take profit and stop loss level. In other words, this is how you trade manually the forex markets.
But, instead of sitting watching the charts for hours on end, the forex robot (or your Roomba) can do it for you. All you need is some basic MQL5 coding knowledge to get started. Alternatively, hire a coder, probably someone on Freelancer.com or Upwork.com for a few dollars.
It’s that easy. And, top forex robots and forex expert advisors have the technology to do this fairly simple trading process automatically. As a matter of fact, you might be able to find some free forex robots that have an accurate algorithm.
This is a simple strategy to give you an entry-level understanding. The hard part is making money from your algorithm. And, if you’ve found this blog post on Google, I’ll assume you’re in the mindset of purchasing or trading forex with an EA or robot provided by a 3rd party that can be integrated to your trading platform. Probably with a promise of untold riches, all you need to do is to find a legitimate forex robot, turn it on, and wait to collect the cash.
Still, there is some crucial factors you need to consider before you activate such automated trading systems. First, you must choose a reliable forex broker that gives you access to a demo account in order to backtest your algorithm with virtual money before you start trading with real money. Further, most forex brokers even provide unlimited demo accounts so you’ll be able to constantly backtest your trading strategy with virtual trades. Then, once you see the forex system works well, you can meet the minimum deposit requirement set by the broker and test your trading robot in live trading.
Secondly, once you are ready to run your forex bot in the live trading markets, you need to find a good VPS provider. This ensures that you won’t have any losing trades due to slippages and disconnections. At last, it is also advisable that you find a reputable forex signals provider and a plethora of risk management features to get the most out of your automated trading account.
Can You Make Money with Forex EA Robots?
Even if you’re going to trade with the best forex robot in the market, you aren’t going to own a Lamborghini with an accompanying bikini-clad blonde from this magical software. You would have been better off buying a Roomba (at least you’d have a nice clean floor.) The truth of the matter is, you probably won’t make money long-term trading currency pairs with an EA or robot.
Think about it for a moment. Do you really think there is a piece of forex software out there that you can buy for a few hundred dollars that’ll outsmart the market for years to come?
These forex robots and Expert Advisors are also what’s known as a black box system. We don’t really know how they’re built or why they work. All we can do is attach such a robot to our charts and cross our fingers when it’s executing trades. In some cases, the only people that make money out of forex robots are the vendors who sell them rather than forex traders.
Having said that, there is a place for automation in your trading. But in my experience though, it only works with manual trading. You MUST understand the reason the forex market is moving in a certain direction and couple this knowledge with a technical overview. Also, you should get the best tools in the market to get good trading results as a forex trader.
There are no shortcuts to successful trading. You need to put in the effort if you expect to succeed in your forex trading journey. If you have the passion and dedication, then you will eventually succeed and set yourself up for financial independence just like I have. Nonetheless, you need to find one of the best forex robots or create your own forex trading robot by using the methods we have mentioned above.
Please check out my YouTube channel for more lessons on how to succeed in your trading. Andrew Lockwood, Professional Trader & Coach.
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