Forex robots are everywhere. Every day I get emails promoting several different robots that promise to make a fortune in a couple of months.
Let’s check the good, the bad and the ugly things about Robots:
- Trading robots are extremely simple to install in metatrader and they can analyse the markets and place trades automatically
- With a trading robot you can easily backtest the performance and find out how good has this system performed in the past
- Usually trading robots allow you to change the default settings and creating a slightly different robot that has better performance than the original version
- Trading robots can also be used as a signals service that alerts you anytime there’s an opportunity and you manually check your personal conditions to decide if you enter in a trade or not
- Trading robots have no emotions so they always stick to the trading plan
- Since robots are completely automatic, they allow you to trade forex even if you don’t have the time to stay in your computer
- Trading robots aren’t that smart. They can’t think like you and me, so they can’t adapt to different markets or to news releases. Due to this, good robots need to be updated from time to time in order to adapt them to the new market conditions
- Trading robots demand you to leave your computer on most of the day. If you turn off your computer, the robot won’t work. Recently some companies started to sell services that allow you to use your trading robot without having it in your computer (install it on their servers), but this sort of service costs more than $50 a month and no one tells you what happens if they have problems in their servers…
- Usually a trading robot only works for a specific currency pair and for 1 or 2 different time frames. In case you want to trade for example the 4 majors successfully, you’ll need at least 3 different robots
- Forex robots give you a false sensation of security. Just because a system performed well in the past that doesn’t mean it will work well in the future, but robots give the impression that they are so high tech that they won’t fail.
- Most trading robots are famous for the empty promises they make and false claims. They promise to double your money or more in 1 month, and that’s not possible. If those robots were so good, those who developed them would be billionaires. Have you seen any forex robot developer becoming a billionaire? I don’t think so.
I hope you find this article useful and that you can better understand how this trading robots work. I believe some trading robots are useful and they can be a good tool to add to your trading arsenal, however I won’t trust blindly in any robot.