The Reality About Forex Robots And What You Should Beware Of

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The subject of forex robots is very predominant lately in the Forex market and is particularly tricky. For this reason many traders ask me if forex robots are for real.
Before we begin, we must define what trading robots are. Apparently, the biggest business in this environment is the development and analysis of trading Forex Robots (Expert Advisors - EAs). An Expert Advisor is an algorithm, or simply put a program developed in MQL4 executed in the trading software MT4.
The problem with robots is that prices do not always behave the same way. Sometimes they move in range trading and sometimes they trend. The change from one form to the other can sometimes have detrimental effects on a robot.
Finding a profitable robot can be a complicated task but not impossible and when you do the prospects are really great! However, if not careful in your choice you could be faced with a couple of problems.
Forex Robot Defects
A trading robot is supposed to automate a trading system, i.e. the set of rules for buying and selling currencies to make profits in the Forex market. The problem is that by automating robots, inevitably the defects of these systems are also automated.
Let us go through some of the problems that can occur when trading with Expert Advisors.
Drawdown Factor
Often a trading robot generates too strong positions which can potentially lead to severe losses. Indeed, if the account is emptied by a margin call caused by a significant drawdown, it can no longer provide sufficient margin to continue to trade and generate profits.
Not Adjusting to Market Conditions
A robot is a machine and operates like one. It can therefore not adapt to changes in market conditions, as it will function the way it has been programmed to.
Do avoid this problem, programmers have found several solutions:
- Scalping
- Martingale and hedging
In all cases there are drawbacks.
In the case of scalping, an activity that involves taking positions only for a few seconds if the price moves sharply in a very short time you can lose a lot compared to the usual gain (1-2 pips).
Too many open positions at the same time
Often Expert Advisors do not adapt very well to each account:
- Too many open positions
- Very high Leverage
In case of a sudden market in the wrong direction, a whole account could literally vanish in to time.
The problem of back tests
Vendors have two choices to advertise the praises of their algorithm:
- Display backtests
- Show the actual performance of robots on a real account
Regarding the backtests, you must know that when you are not scalping, the results depend a great deal on the structure of the market for the periods corresponding to the test. The fact that the market is trending or ranging influences the result.
Often, the period chosen does not contain enough rate configurations.
In addition, there is a real problem of data quality. Just on MT4 there are 3 ways to use historical rates.
These are just a few of the drawbacks with regards to Forex robots. As mentioned in the beginning of this article, automated trading is a reality and significant profits can certainly be made on auto-pilot. However, you choice of a Robot is the very first step to a successful investment or else a bad choice will literally destroy your account.
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Can a Robot Make Money on Forex?

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Forex robots, also known as "expert advisors" are the latest craze in the online financial trading business. Every now and then, there comes a wave of new technology aiming to be the next revolutionary innovation and promising people to make them rich overnight. Many people have similar expectations of automatic money machines. There is no dearth of overnight rags to riches stories associated with such technologies that attract many people to make money on Forex. 
However, plunging into such an idea with little background preparation is liable to make even the most foolproof ideas fail. Things are no different with a profitable expert advisor.
Automated trading machines are actually developed as artificial intelligent programs that are connected to the online financial markets and are conducting transactions automatically for you. All they claim you need to do is turn on your system and let the Forex robot make money on Forex for you. You can set your preference levels on the software, such as your buy and sell points so that the trading robot can take up the job from there. You do not need to provide any further instructions to the system. The question that comes to mind is that does it actually work, and is there really something as a guaranteed profitable robot?
The truth is yes, and no. There are some robots that truly make smart decisions and help you earn profits on your foreign trades. However, such a Forex robot is rarely found as there are a few Forex robots you can blindly trust to make profits for you. Some are certainly not that efficient so they may not make money on Forex or even earn you a single penny for months. On the other hand, a number of Forex robots are programmed to give you deceptive results. You may think that you have earned profits, but, in fact, you may have lost all your investment.
Before you make your research on a profitable software, the best thing to do if you want to make money on Forex is to get some knowledge on the Forex market so you can set the right settings on the program. Know how the market fluctuates and when is the best time to trade. Learn also money management principles and remember not to be greedy. These money management practices will help you get the most out of a Forex trading program and turn it into a truly profitable Forex robot.
More information on a profitable Forex robot can be found here http://forex-robot.net
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Issues Involved When Trading With Forex Robots

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Who doesn't wish to have a share in the three trillion dollar forex trading market turnover made on a daily basis? If you are among those beginners who are learning the way to be part of the Foreign currency trading market and having trouble to cope with it, you would probably additionally listen to a lot of talk, related to getting a Forex Robot (Expert Advisor - EA) to help you with your trades.
We have heard precisely how great these systems are and how a number of people have gained lots by using EAs. Yet how good are they, in reality? Might they just be extremely effective that we don't need to feel concerned about just about anything? Contrary to what most people believe, EAs certainly also have downsides.
Exactly what are these disadvantages and how by simply, being well informed can we stay away from them?
Relying Too Much on Your System
A Foreign exchange system is there to assist you, but certainly not to fully take over for you. A common mistake made by forex traders is they allow automated trading systems to perform the work for them and hardly ever put in even minimum manual trading. This could possibly turn into a trading disaster in the long run.
In case you rely too much on your system, how would you react in case your pc crashed or your Forex Robot experienced problems? Would this result in the end of your FX trading career? Having enough knowledge carrying out trades manually could save it, which makes it extremely crucial if you happen to truly desire to succeed in foreign currency trading.
Another point is that most FX traders who make use of EAs would simply leave their system to operate on its own. Automated trading systems, specifically, EAs have a function referred to as optimization. This is able to allow traders to examine previous transactions and decide how trades were won within the past. This would allow your system to improve its program. Nevertheless, there would be instances when the optimization process would be way too much. It could very well keep enhancing its system until it perceives that there are no losses on the data files. Nevertheless, this could buy time and might even lose transactions in the end.
Believing it's magical
There is no such thing as an ideal program. There are a few EAs that declare that they have actually zero losses under their belt. Programs that state this, might in most cases be generating losses. There are professionals who say that a program like this might truly break-even after 20 years!
So, just the same with the first factor, even in the event that there are Foreign exchange trading programs that promise to have as much as ninety five to one hundred percent gain, relying on them excessively and letting them carry out the trades without the trader getting engaged, may lead to disaster. Nonetheless forex traders must dig deeper to grasp that, truly, their account could turn out dipping around seventy five to eighty percent. Eventually, this might entirely deplete their account.
Alert indicators
Some EAs would use inadequate money management strategies, such as stop loss which could possibly be greater in comparison with the target. Others would not possess any FX trading strategy at all! Some would not permit backtests, which is one thing that traders should be acutely aware of.
Bottom line is that no forex robot can make you wealthy by millions overnight or in weeks. The foreign exchange market is unpredictable and could possibly be very exciting. Nonetheless, to be successful in this area, miracle-staff like for example an automated forex trading system, just isn't the answer. In fact, it might assist or deliver the required support in Foreign exchange trading. However, a great forex trading state of mind and skill could take you to a lengthy way.
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