Trading on Forex, it may be tempting to just to sit back and let a pro or an automated device do the work for you, but are Forex robots really effective?
What is a Forex robot? It is a software application specifically created to perform trades on the Forex market through computer automation, a system that analyzes past data and tries to predict the price based on that. It has no logic to thinking about fundamentals, about sudden changes, about different unexpected events. Some robots are able to scan numerous charts and watching their movements all at the same time which is beyond human capability.Also, robots are programmed with parameters needed in making trade decisions. With embedded trade signals, they decide when or when not to trade.
When trading on Forex, sometimes it’s tempting to just to sit back and let a pro or an automated device do the work for you. This is why Forex robots have become popular. Basically, robots and other forms of automated software promise to make traders big profits with little or no effort on their part. The main goal of these Forex traders is making easy money out of Forex market without doing anything manually or having to sit at the computer. Robots users have to find a good currency pair and ideal time frame to trade in it to maximise their profits. This is what the robots’ developers let them know when they buy the robot.
How Effective Are Robots?
Although Forex robots promise to make profitable trades, it is not unknown, that the Forex market is full of scams, especially when we talk about robots. That’s one of the reasons why you’re not too likely to find articles that promote them in the Wall Street Journal, or any other reputable news source. Online robot merchants sometimes promote their robots by claiming their competitors’ are scams. Automated Forex trading software or robots are good opportunities for their developers to make money, not for you as Forex traders. They not only don’t make your rich, but they can also wipe out your account and blow up your trading capital.
Some robots may even work – they just use technical indicators and complex algorithms to predict the price, and often the price may be predictable, but why would you trust a ‘thing’ that is so cold, so fake, and so empty. After all, Forex robots are only robots. Even though they can perform highly sophisticated tasks, they can’t think creatively. Likewise, they can’t imagine what may happen in the future as their functionality is limited to how they were programmed and past performance.
Why are they so popular?
Forex robots can make their developers millionaires. Smart developers know that people are eager to make money and forex trading is one of the ways they can follow to make money. However, they use this as an opportunity to create a robot or software (or an e-book, DVD, course, seminar, webinar, …) to sell and make money.
Some robots offer solutions to find profitable trades even in erratic market chaos when the trending direction is unclear. By following the best trend, they can maximise their profits and possibly eliminate chances of taking losses. Obviously, trading against the trend leads to loss after loss while trading with it maximises profits regardless of the method or robot that is used to trade.
In conclusion.
If you want to know how effective some specific Forex robots are, check out and read carefully their own reviews online. For traders that use one, they should not depend on it to do conduct all their trading activity. After all, trading requires a great amount of human observation and research. Also, humans, not software, can follow up with economic conditions or keep up with the financial news. Robots can only find positive trends and trading signals, but sometimes their functionality is adversely affected by jittery trends or false information. Hackers and viruses might also hamper robots. Most robots make a few pips with each position they take, trading inside the tight range during the slowest forex market time; they set a very tight target and too wide or no stop loss. They succeed to make a profit in most of the trades they make because they make a few pips on each trade, but a sudden, strong and unexpected range breakout would wipe out all the profit they have made. Could a trader survive with such a strategy? Absolutely not.
Forex trading is skill, knowledge and art. It is something visual and analytical. It cannot be done in a software-automated system. Besides, markets conditions change all the time: the Forex market is very dynamic, it is always evolving and the factors that move the prices tend to change as well. Again, how would the robot measure the sentiment? What about the traders’ psychology? It is really difficult to know what’s next for sure, even if you analyse past data again and again. It is only an experienced trader who is able to distinguish when to enter the market and when to stay away.
Even with a good robot, keep trading by yourself. Feel the market, have a vision, understand the price movements, the fundamentals, be active with the indicators, and so on. Have confidence in your own decisions.
