Forex Robots make money on repeated technical analysis based aspects of forex trading. Such aspects lend themselves well to automation. Profitable long term FX trading is much more than that, but forex robots (bots) or automated services can have their benefits.

However – regardless of their complexity and capabilities – forex robots do not provide a one-stop solution for instant profitable trading.

 

 

What is Forex Robot?

A forex robot is a specialized program/software that generates trading signals through mathematical algorithms using technical indicators.

Some FX robots merely provide these signals to traders. Others can act on them. This is the latter variant that truly deserves the name “robot”.

Having software that does all the hard work for you certainly sounds appealing. All you really have to do is go about your life and make a profit when you feel like it.

That’s not how automated trading works. There are quite a few peddlers of such systems out there who want you to think the same about Fx robots. However, on this page we want to discuss serious and workable automated trading systems. Such systems require constant adjustment and human supervision.

The real question is: do these FX robots work and how do they make decisions for you?

 

 

How does Forex robot work?

Expert Advisor (EA)

MetaTrader ‘MetaTrader 4 (MT4) is an online forex robot platform called Expert Advisors (EA).

The EA uses a multitude of technical indicators and custom scripts to take trading signals and act on them. Anyone can code the EA directly through the trading platform. The programming language used for this purpose is MQL 4 (MetaQuotes Language v. 4).

There is a vibrant market where traders and programmers buy and sell the best performing EAs.

Top forex robots are capable of scanning a large amount of ungainly charts. Through the technical indicators they use, they then find trading opportunities.

Once it identifies such an opportunity, the robot can recommend it to the trader. It can also act on it, opening a position according to a set of pre-programmed parameters.

Limit

In both phases of operation, the limitations of the robot/EA are very obvious.

Experience has shown that automated trading only really works within a tight range. Also, the presence of a well-defined trend is a big plus. Automated trading profits are usually only up to a few pips. Provided that is right, forex robots can be quite successful.

However, due to these shortcomings, large price swings can wipe out all profits in a split second.

Choppy markets and negative trends are the enemies of profitable automated trading.

Therefore, it is imperative that the robot user find a trend in the right direction and strength, before handing over the reins to the Brain Algorithm.

Does automation really work?

By no means easy or simple to create forex robots that work. Programmers pour countless hours and tons of effort into building such a piece of software. The large number of variables it has to juggle makes it clear that this is no simple exercise.

With that in mind, the idea of a working, freelance trading robot quickly becomes unbelievable.

That said, the actual effectiveness of a working forex robot is quite impressive. Furthermore, the authorities consider such auto traders to be novelties unreliable at best and scams at worst.

That’s probably why you won’t find a serious FX publication promoting forex robots.

Trading experience

The forex robot industry itself is not conducive to trust. The peddlers of various trading bots do their best to discredit competitors. It’s a bit of the Wild West out there, and the winners are rarely the ones who buy forex robots.

Therefore, your best bet to find a working forex robot is to learn the feedback provided by real users. Make sure you are dealing with genuine feedback. Forex robot creators have an uncanny knack for faking user reviews.

Genuine forex robots always require a lot of user input. That means the ideal user is not an ignorant beginner. He/she needs to fully understand the market conditions under which his/her robot works. The bot is only supposed to take the repetitive workload off the user’s shoulders. It couldn’t be the party of the smarter.

If that’s what you expect of it, you’ll definitely be disappointed.

Bespoke Robot Strategy – From You

Then you must be able to set up your FX robot to properly execute your vision. Once you’ve done that, you need to keep an eye on the market/fundamentals and something else about your robot, constantly tweaking its settings. Turning it off completely and taking a completely different approach is also usually warranted.

Forex robots dangling a deal on fire and oblivion are always scams. No one will sell you a forex robot capable of accumulating unprecedented profits in autopilot, for just a small amount of money.

That sounds too good to be true and it really is: it is.

Bottom line: don’t expect much from your robot and know that you will have to do a lot of work even with automated trading.
Steer the forex robots for free. The same goes for all trades that are too good to be true.

 

 

Advantages and disadvantages

The advantages of forex robots are obvious. If you have a really effective, mechanically repetitive trading strategy, you will be able to trade robots for you 24/7.

FX Robot takes the mechanical work out of the forex trading equation. However they cannot help you any further.

They cannot come up with their own strategy and therefore they cannot adapt to changing market conditions.

Successful forex trading requires skill, intuition, an analytical approach and knowledge. Forex robots have none of those attributes.

All auto traders, even the best forex robots in the world, work on technical analysis. By definition, technical analysis uses past data to try to draw conclusions regarding future price movements.

Historical Forex Data

Any broker will quickly tell you in the fine print: past data is not an indication of future performance.

As mentioned, the forex robot market is a genuine Wild West. The actors have no punches and no tricks for sale.

One trick that legitimate-looking forex sellers like to turn to is the process of picking the best backtest from the hundreds or thousands. They then present backtests that are the results that system buyers down the road can expect.

So, your favorite FX robot that has been hit back probably doesn’t make any sense.

Forex scam

The forex robot industry is fertile ground for all kinds of scams. It always has been, and it will probably continue on that path.

The semi-legitimate nature of the very idea of being an auto trader leaves plenty of room for such shady scammers.

How can you say that a forex robot is a scam?

  • – Its provider offers it for free. No one is going to put work and time (possibly money) into creating a robot to give away for free.
  • – It guarantees profit. No one can guarantee anything when it comes to automated trading.
  • – The robot is so advanced that it can come up with its own strategies. This is simply not possible.
  • – Obviously, the robot works based on some super advanced technology. This used to be a scam scammer’s favorite to pull back in the days of binary options auto trading scams.
    There are always gullible people out there, and bank scammers about possibly fooling at least some of them.
  • – The price of the robot is reasonable (for example in the $20-$100 range). This makes no sense. No one will sell you a capable forex robot for that price.
  • – Sellers claim that robots are a lasting and forgettable solution. Most forex robots that work are scalpers, because automated trading tends to do very poorly in the long run.

Conclusion

Forex robot using technical analysis. As a result, they are severely limited in what they can accomplish.

To be able to use robots to your advantage, you probably need to be a skilled trader, as well as a skilled programmer.

That said, there are legitimate automated trading solutions available. Forex robots work however always require constant human involvement.

If you take a quick look at some forex robot forums, you will be able to tell which auto traders are actually legit. You will also see community members there discussing different setups for their FX robots.

These setups aggregate automated trading conundrums. The source of the winning strategy is the trader. Forex robots can only ease the mechanical workload. There’s not much they can add to the profits other than that.