Forex trade robots can be defined as a software application programmed to initiate trades on the foreign exchange market by means of computer automation and trading signals. This automated trading software (forex trade robots) empowers forex traders with the ability to inaugurate specific rules for trade entry and exit that can be automatically implemented through a computer. These trade entry and exit rules are majorly based on market conditions like moving average crossover and the past and present trends of a currency pair.
FUNCTIONS OF A FOREX TRADE ROBOT
Forex trade robots are known to perform functions like initiate and carry out various currency and commodity trades in the forex market using automated trading signals. They identify trading positions and act on them based on specific pre-arranged rules.
Forex trade robots are mainly used in the identification of several and specific trade entry and exit points of a trade. They are also used in the calculation of perfect position sizes at every section of the forex market.
Forex robots have the ability to incorporate a system of effective money management strategy by reducing risk and looks out for great quality existing trade positions around the clock which is 24 hours whether day or night. This singular act conserves prime profits and gains reinforced by minimum risk.
A forex robot has the ability to identify final moments of a volatile forex market trends, its volatility edges below which the leading market trend is located. These forex robots don’t disregard specific circumstances when these volatile limits take place close to significant forex market levels. They also have the ability to forecast price levels that should be exploited when the forex market is rearranged after a volatility breakdown takes place. It also has the ability to set predefined rules, guild lines and orders based on possible predictions.
ADVANTAGES OF USING A FOREX TRADE ROBOT
AVAILABILITY and AUTOMATION: Forex trade robots are always available in that they are very easy to procure and download. They are also very easy to set up and use within an hour. All forex robots are seen to be automated software which means that they don’t involve the manual participation of forex traders giving them enough time to engage in other activities.
ERADICATION OF HUMAN EMOTION FACTOR
Most trades fails and goes into minimum profit and maximum losses because of human emotions. These human emotions might be in form of fear of losses and greed of more money. They are known as detrimental factors in trading for both beginners and expertise. Forex robots are known to overcome these human emotions and maximize profit.
Forex trade robot are automated trading systems that encourages the complete programmability which gives forex traders the ability to adjust risk levels, profit levels and other different trading variables. The method of optimizing the forex robot software to initiate and carry out trades is a major factor to increasing profitability.
DISADVANTAGES OF USING A FOREX ROBOT
Even if forex trades robots are seen as an automated trading system that require no manual assistance from the forex trader, they require monitoring in cases where the robot may undergo mechanical failure like inadequate internet connection and breakdown.
Most forex trade robots are not beginner friendly in that they require the ideas of a trading expert in areas of knowledge and experience. A forex trader using forex robot for trade needs to have an idea of setting trading strategies for the forex robot. He also needs to have an experience on real life trading platforms.
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.