Machines are taking over the world. The rise of machines has not yet occurred, but many lines of code are already affecting our lives in every conceivable way. The forex market is no different. Would you like to learn how Forex artificial intelligence can influence your trading? Read our article to learn about Forex robots.
How does Forex Robot work?
Please don't worry, there won't be a Terminator in front of your laptop. Robots are programs, codes written to implement a trading strategy. During the night, it uses technical signals to execute trades while the trader sleeps. It is possible for this program to help a trader accomplish something on the market or to trade fully automatically, depending on the indicators and initial settings.
Automated trading? That means you don't need to do anything? In reality, the robot can be used for automated trading on both a partial and full scale. There is an advantage to each option. Market patterns can be analyzed by clever robots, reading signals and particular indicators - some traders opt to place the whole trading process in the hands of the code with their settings. Even if some traders prefer to still participate in the trading process while relying on robots for only a part of the market performance. Traders keep the robot under supervision, since it's clever, but it's still just a piece of code.
How about some pros of using a robot?
When you use Forex robots, you get more "free" time as a trader. These devices analyze the markets and place trades 24 hours a day. Automated robots can process the order signals in a fraction of a second, eclipsing the performance of any professional. It is critical to understand that most good robots include risk management in their code, so if you trade with one, you are less likely to lose your deposit to emotions. The robots also help to reduce psychological pressure because you don't have to watch the chart to see what's up and down, only the machine does. Is it true that the robot is always right? Is there a downside to this?
Robots follow rules that they must follow. They are always right in terms of their own settings and indicators. The rapidly changing market environment, however, can't be adjusted by them on their own. A robot is intelligent, but it is also a computer program, which needs updating from time to time. Anytime the market moves beyond the initial parameters of the robot's settings, the programmer needs to update the code or rewrite it. It might become a serious disadvantage to some people for robots to be updated according to market conditions.
There is something useful about robots, but they all seem so different!
Indeed. The configuration of trading robots can be different, just as it can be with any other software. You should get the manual as soon as you buy a robot so that you can learn how to install it - otherwise, it will just be a bunch of strings of code. You'll get an inside look at the robot and have the chance to customize it for your needs if it has more manual and personal settings. Additionally, if you wish to go the extra mile, you can write the robot yourself: then it will be tailored to your trading requirements and most probably will fit them perfectly.
So a good robot - how do I choose one?
In order to select a suitable trading robot, you must first determine a sound trading strategy. Make sure you don't get fooled by the big profits percentages of rapid robots - it might be the result of aggressive settings, which will result in your deposit being risky in the future. Be sure that you are following your trusted trading strategy, otherwise a robot could easily disappoint you. The only way to truly know whether your robot is working correctly is to test it. There are many different pieces of advice available on how to choose "the one". What about testing? Could you explain?
It should be tested after the robot is essentially set up. It's common for people to test their robots on demo accounts, but there are serious reasons not to. Traders can make bolder decisions when they know they aren't trading real money when using demo accounts. Calculations should consider the physical aspect of real market stress if you are testing a robot. Secondly, the spread on demo accounts is usually not present, execution is flawless, and so the robot cannot be taught how to avoid the traps of the market on demo accounts. Therefore, while you are developing your robot, start with the type of accounts you intend to use it on.
Specifically, what type of account is best for using robots?
It doesn't matter what type of account you have. In some cases, people prefer to install robots on Micro and Cent accounts to automate the process of performing many small, more or less similar orders. For long-term positions, some people use standard or ECN accounts. The account you choose depends on your purposes, plans, and how much automation you intend to use.
Any other suggestions?
Keeping this in mind, robots are not some sort of magical artificial intelligence that will make you rich in a second. As default, most robots are too simple and inaccurate to perform well unless you customize them with the signals that you need. Ideally, you should have enough trading experience to teach the robot how to trade for you.