Forex robots popularly known as expert advisors (EA) are programs that are automated to carry out trading positions with or without the trader’s direct involvement. The forex robots with a tab can run multi tasked trades simultaneously. The loop-hole of the forex robots is that they don't tend to come to terms with the ever-changing market conditions. These robots are not programmed for certain waters & as such don't recognize a trend change in the market. Forex robots tends to eliminate the human (indecisiveness of the trader to take trading opportunities) part in trading that could be regrettable. These forex robots are quite out for sale and could be bought online.
BREAKDOWN OF THE FOREX ROBOTS
Forex robots are programs designed to look out for signals & conduct trading positions (that’s whether to open a trade or not) with or without the traders direct involvement. This tends to provide alternative decision of whether to buy or sell trading options. The popularity of the EA is on the increase despite the low returns it tends to bring forth. The basic thing the trader needs to know about the forex bots includes the following;
The first fact is that the forex bots have been tested in real market conditions. This may come as a shocker to you but they have never been tested as this robot only feeds on past data's.
The second fact is that trader has automatically trusted the system with his/her asset base (money). It's programmed on a set of instructions that it has no obligation whatsoever to conduct changes in trading open transactions.
The third fact is that they are programmed to be whatever the trader installed in it to be nothing more nothing less.
HOW TO KNOW A GOOD FOREX MARKET IN THE MARKET
Every trading robot should be tested to know how the robot fits in real market environment. It's important to get basic know how of the workings of this system. So this are the best ways to identify a good robot to purchase in the market, if they don't reach this criteria's then you should really consider not buying it at all. They include the following;
It's ability to thrive to a 13 year back-test
It's ability to trade on every signal gotten
The brokers side stop loss & take gains should be used
The most crucial things is to know the maximum breakdown in pips
The risk/gain ratio must be greater than 1:1
Breakage of resistance is allowed but conducting trading positions above or below is unacceptable
If every rule is obliged to then the robot is good
The gains should increase over the years.
WAYS OF INCREASING THE PERFORMANCE OF THE FOREX ROBOT
There are many ways of increasing the performance and they include the following which could be employed by any trader for maximum yield of profits;
Always have an exit plan
Eliminate costs by trading on low spread accounts
Know the MAE (maximum adverse excursion ) & MFE (maximum forward excursion)
Reduce the MT4 work space
Test the method using real data
There are many important advantages of using the forex robot. They are employed by traders for opening and closing trading transactions. They include;
They trade 24/7
They operate on programs
They tend to respond to changes/opportunities faster
They consistently trade plan
Makes trading experience easier for the trader
They are programmed to work on broker with tight spreads
It's almost impossible to get a forex robot that understands economic & political events.
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.