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What is Forex Robot?
The term Forex robot is commonly used to refer to the automated programs which are used to generate trading signals.
This is the common name for the technical one algorithmic trading.
Most of these EAs are used to automate trading decisions, and the most popular ones are those which are built with MetaTrader. The concept of using a computer program might seem the easiest way to go about it, but it is important to note that not everyone is able to trade successfully in this manner and it is still vital to have an automated trading strategy.
Forex robots can trade automatically around the clock. There are a number of forex robots on the market, and most traders opt to buy one off the shelf. However it is important to be careful as there are many scams too. It is best to carry out some research as well as consider important aspects such as backtesting, and whether results are based on live markets not just on simulations. Some traders also try to develop their own automated trading systems.
It is important to mention that in many cases forex robots may manage to generate profits in the short term but they are not likely to sustain this in the long run. This is mainly due to the fact that due to their automation they may end up moving within a particular trend, and any sudden and unexpected price movements might negatively affect the results.
Types of automation:
- Fully automated such a system will scan the market for trading opportunities and carry out the trade electronically based on predetermined rules.
- Semi-automated the program will analyse the markets to look for possible trading opportunities. It will be based on a pre-programmed strategy. However rather than making decisions on behalf of the trader it will send him trading signals with key details like entry prices and stop-loss orders, so as to enable him to act accordingly.
The main idea behind forex robots is that they can help to reduce the psychological and emotional impacts that a trader can be subjected to while trading. While this may be one of the main advantages of forex robots, it is important not to overestimate them. It is still critical to keep an eye on what is going on and to be careful. A strong and reliable internet connection is critical, and you need to bear in mind that forex robots may be great at technical analysis, but they are not as good as the human mind when it comes to reading and interpreting data, especially when it comes to fundamental analysis which is also important when trading.
This is the common name for the technical one algorithmic trading.
Most of these EAs are used to automate trading decisions, and the most popular ones are those which are built with MetaTrader. The concept of using a computer program might seem the easiest way to go about it, but it is important to note that not everyone is able to trade successfully in this manner and it is still vital to have an automated trading strategy.
Forex robots can trade automatically around the clock. There are a number of forex robots on the market, and most traders opt to buy one off the shelf. However it is important to be careful as there are many scams too. It is best to carry out some research as well as consider important aspects such as backtesting, and whether results are based on live markets not just on simulations. Some traders also try to develop their own automated trading systems.
It is important to mention that in many cases forex robots may manage to generate profits in the short term but they are not likely to sustain this in the long run. This is mainly due to the fact that due to their automation they may end up moving within a particular trend, and any sudden and unexpected price movements might negatively affect the results.
Types of automation:
- Fully automated such a system will scan the market for trading opportunities and carry out the trade electronically based on predetermined rules.
- Semi-automated the program will analyse the markets to look for possible trading opportunities. It will be based on a pre-programmed strategy. However rather than making decisions on behalf of the trader it will send him trading signals with key details like entry prices and stop-loss orders, so as to enable him to act accordingly.
The main idea behind forex robots is that they can help to reduce the psychological and emotional impacts that a trader can be subjected to while trading. While this may be one of the main advantages of forex robots, it is important not to overestimate them. It is still critical to keep an eye on what is going on and to be careful. A strong and reliable internet connection is critical, and you need to bear in mind that forex robots may be great at technical analysis, but they are not as good as the human mind when it comes to reading and interpreting data, especially when it comes to fundamental analysis which is also important when trading.