There are over $3 trillion dollars transacted daily in the Forex
market. One may think that the chances of getting a huge profit should
be pretty high. But studies have shown that about 5% of the traders are
actually making significant & consistent profit. This means that
naive traders with no knowledge of Forex market and gamblers will find
it tough to survive here. So where do Forex robots (Expert Advisor) come
in? Are these robots capable of bringing the huge profits it so
claimed? First, we need to look at the pros and cons of using such an
automated system in the Forex market.
Disadvantages
1. The robot needs to run on a computer or a VPS (Virtual Private Server) 24 hrs a day in order for it to perform properly.
2. Most software work best on brokerage firm that can offer currency
pairs with tight spread. Therefore, it may not be suitable to run on
every Forex account on Metatrader trading platform. This may limit your
earning opportunities.
3. Most of the software is written specifically for one currency
pair only, although there is some that could run on multi-currencies
pair. Reason is because there is no single mathematical formula that
works best for every currency pair.
4. Manual intervention of the robot during trading may cause it to malfunction and turn into losing trades.
5. Most robots do not trade on days of high volatility.
6. The robot does not have the data that are non-programmable.
Hence, a trader must always look at the bigger picture. Important Forex
fundamental data such as economic news and political environment may
affect the Forex market.
7. Newcomers may use Forex robot for the wrong reason. They may
think that because it is an automated trading system hence there is no
need for them to know anything about the Forex market at all.
Advantages
1. Forex robot can trade for you 24 hrs per day without food or sleep.
2. It free up your time to do other stuffs instead of you looking at the computer screen all day.
3. The robot operates on a set of instruction. There is no greed or fear like a human do.
4. Most robots come with parameters that you can configure and fine tune.
5. Forex Robots is able to do data analysis quickly and effectively.
6. New traders do not need to have in-depth knowledge of Forex market but some basic knowledge of the Forex market is required.
7. Most robot developer offer help support and also 60 days money back guarantee of their software if you are not satisfied.
8. The expert advisor has a plan and is consistent in carrying it out.
9. A few Forex robots can monitor many currency pairs at the same
time, giving you many more trading opportunities than the manual
trading.
10. Automated trading is a lot easier as the robot has taken over most of the tasks of the manual trader does.
In
summary, Forex robots can perform trades with greater accuracy and work
for you 24 hrs a day. They can trades for you even in your absence.
Almost all robots allow you to perform back testing to prove that they
really do work. They help to save you time so that you can do other
important stuffs like improving your skills further. On the other hand,
although Forex robots can help you find winning trades, but they do come
with some risks and short-comings. Most of these robots are optimized
on a particular currency pair. If you need to trade more currency pairs
you have to buy additional robots. Trader must also look at the bigger
picture such as the fundamental data and news that may affect the Forex
market.
Undoubtedly, Forex robots are definitely getting more
popular in the Forex market. Thus the probability of finding the right
robot becomes more difficult but it is not impossible. As mentioned,
there are pros and cons in using Forex robot, individuals should choose
carefully. These will ensure that you will continue to enjoy trading the
Forex market.
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