Good or Bad? Let’s Help You Decide with a Helpful Guide to Forex Robots
As you gain more trading experience, it’s natural to become curious about auto-trading and the best Forex robots. After all, if there’s a tool which can save you time and effort, you’re going to want to use it. Although Forex robots can seem intimidating at first, our list of the best robots and our comprehensive guide should put you completely at ease.
On this page, we’ve listed the best Forex trading robots of 2019 for you to choose from. These have all been carefully selected by our expert team, to ensure there’s something to fit your every requirement as a trader.
We’ve also provided all the information you need to start using Forex trading robots. This includes how automated trading and Forex robots work, what benefits they offer and how to incorporate them into your trading activity.
What is automated Forex trading?
Becoming a profitable Forex trader means spending time watching the movements of the currency markets and keeping up with world economics and news. This used to mean hours spent sat at the computer, trying to keep up to date with relevant events. However, there is now a tool that can save traders from such an onerous task, and it comes in the form of Forex robots or automated trading.
These robot Forex tools, which are sometimes also known as Forex EAs, have become very popular, particularly in today’s busy world. Many traders are now taking advantage of the best Forex robot systems, which do everything for them, apart from providing the necessary funds. This allows today’s modern Forex trader to get on with their normal life, without constantly worrying about the state of the Forex market.
What is a Forex robot and how does it work?
Automated Forex trading makes use of a tool known as a Forex robot. These Forex trading robot tools are basically just a computer program or algorithm. The program scans the Forex market looking for profitable trades to take advantage of. The robot’s algorithm can be based on pre-set parameters or trading strategies and the robot can either be instructed to trade automatically on a trader’s behalf or give traders the option to enter the trade manually.
Most Forex automated trading robots use technical indicators to help find profitable Forex trading opportunities, although different robots will use different trading strategies. A Forex automated trading robot can watch movements far more efficiently than a human and they aren’t burdened with human emotion when it comes to making trading decisions.
Things we consider when choosing the best Forex auto trading robots
- Back-testing– We always look for Forex trading robots which have been back-tested on various currency pairs, and in a variety of market conditions. Back-testing shows us how the program functions in different market conditions, such as high and low volatility, announcements, and important news. It also indicates possible losses, wins, maximum drawdown, and risk-to-reward ratios. We perform back-testing on every single robot which makes it to this page. A genuine robot merchant shouldn’t mind us doing back-testing and so, if they do, they are immediately struck off our recommended list.
- Live trading results– It is common for robot sellers to promise a winning ratio of 90-99%, however, this figure can be very deceiving. In order to be certain that we only recommend the best Forex robots and auto trading software, we decipher whether this ratio is based on real-time or simulated trading. There is a big difference between results in real-time trading, where markets can be very chaotic, and simulated trading where parameters are strictly controlled. Simulated trading also doesn’t reflect liquidity, which is a crucial part of real-time trading, and simulated trading can easily be manipulated so that the Forex robot comes out a winner every time. When choosing the best Forex robots, therefore, we only select those which offer live trading results.
- Limitations regarding order size– We have tested how each robot handles a variety of order sizes to ensure that the robot is suitable for all players. Many robots work brilliantly if they stick with a certain order size, but things go awry when there is a change in order size. We check that the robot gives equal results whether the order size is 2, 20 or 200 lots, so we can rest assured that there’s no decrease in profitability.
- Drawdown– Not all traders are the same. Some prefer a drawdown of 50%, while others may prefer 25%. As we know this is a personal preference, we check the drawdown of each robot listed and tried to provide something to fit everyone. We do this on both a per-trade basis and on consecutive drawdowns.
- System credibility– We always check a good number of user reviews and testimonials before deciding whether we should recommend a certain robot. We find out how long the system has been running (ideally it should be at least a couple of years old), and how many users it has. This research helps us make sure we only suggest you use the best robots and auto trading software around.
The advantages and disadvantages of automated trading systems
If you are considering using an automated trading system to assist with your Forex virtual trading, you need to be aware of the main pros and cons of trading in this way. Luckily for you, we’ve listed them all below.
Advantages of Forex auto trading
- Emotions can be kept in check – There is no real place for emotion in Forex trading and, by using an auto-trading system, you are taking your emotions out of the equation. With a Forex automated trading system, orders will be executed automatically provided a number of requirements have been met. Unlike a human, an auto trading system won’t hesitate or question the decision. It can also be a useful tool for Forex traders who are nervous about placing an order, as well as those who tend to buy and sell at every opportunity.
- Trading rules can easily be backtested – Backtesting involves applying trading rules to historical market data in order to determine if they are viable. As a computer program can’t make any guesses about what it must do, it is imperative that it’s told exactly what to do in every scenario. The rules need to be very precise and they should be tested on historical data before any real money is risked in a trade. Once this testing is completed, the trading strategy can then be fine-tuned. This saves you a lot of time and money when it comes to implementing a strategy or system.
- Discipline can be maintained – Even in a volatile market, the rules of an auto trading system will always stay the same. Emotional factors, such as fear of losing or the desire to squeeze as much profit as possible, are removed. Auto trading ensures discipline is preserved, as the preset plan will be followed precisely.
- Consistency – It requires a lot of discipline to remain consistent when trading Forex, especially if you have had two or three losses in a row. Unfortunately, there is no such thing as a 100% successful trading plan, and so you are always going to encounter a loss at some point. After a loss, it can be very tempting to skip the next trade, even though this could potentially be a winning trade. A Forex auto trading robot will remove this decision, giving you consistency throughout your trading activity.
- Order entry speed is greatly improved – A computer is far quicker to respond to changing market conditions than a human and it can generate an order immediately when the criteria are met. Those vital few seconds could make a very big difference to the outcome of the trade. Financial markets can move at lightning speed and it can be rather demoralizing to miss out on a trade because the human brain and fingers didn’t move quickly enough.
- Trading can be diversified – With an automated trading system, you can trade several accounts at once, each with a different strategy. This allows the risk to be spread over a variety of instruments and creates a hedge against losing positions. A computer is much more efficient at this form of multitasking than a human and can execute orders in milliseconds. The auto trading Forex robots can also scour a range of markets for trading opportunities and monitor a number of different trades.
In order to create a realistic picture of automated trading systems it’s time to look at some of the downfalls you should be aware of:
Disadvantages of automated Forex trading
- Failure of the mechanics of the system – Automated trading is a very sophisticated way of trading, but it is by no means without fault. What happens if the internet connection is lost? What happens if a trade order gets stuck on a computer and never gets to the server? What happens when the theory doesn’t match up to fact? In order to avoid being caught out, it’s always best to start small, allowing the system to work and find the minor adjustments required for optimal operation.
- Monitoring is still required – While it might seem ideal to just get on with your day and let the program do all your Forex trading for you, this isn’t a very realistic idea. There are several issues that can occur such as loss of connectivity, power outage, computer crashes and system quirks that need to be watched out for. Failure to pick up such anomalies may result in duplicate, missing or completely wrong orders.
- It might look good on paper but this doesn’t mean it’ll be as good in real life – It is fairly easy for an automated trading system creator to make their product look outstanding on paper. The creator can always perform excessive curve fitting and tweaking of a strategy, which allows it to advertise excellent results. Despite these results, the system could still be completely unreliable in live trading.
Do Forex robots really work?
We’ve got to be honest here and admit there are no sure-fire ways to successful Forex trading, however you plan to do it. There are no strategies, tools, systems, or ways of playing the market that guarantee 100% success. And it is no different for Forex auto trading systems. Although there are several great Forex Expert Adviser robots available on the internet, do you really think that somebody is going to sell the perfect money-making system? Of course not. They are going to keep it for themselves, and in fact, many of the big financial firms keep their automated trading programs firmly under lock and key.
Our aim is to give a totally unbiased opinion of Forex robots and to provide you with a balanced picture of what they have to offer. It is worth pointing out that there are a number of Forex auto trading robots that make rather big promises, yet they are rarely all they’re cracked up to be. A number of Forex robots are actually scams, and there are very few articles from news and financial sources that promote them. It seems that a popular way for many online robot merchants to promote their own software is by bad-mouthing the competition, and many of their advertising claims of traders making huge profits are simply fake reviews.
Whilst many of the hard-selling Forex trading robots you see are indeed deceitful, you can always trust us to only ever recommend you worthwhile robots and strategies. Our expert team always takes the time to test every robot they come across, which allows them to give unbiased and carefully considered reviews. Our reviewing process is also transparent, as we’ve included all our testing criteria on this page, which means you can finally choose a Forex trading robot you can trust and rely on.
Final tips before you pick the best Forex robot for you
The best way to gain an understanding of the benefits of using Forex trading robots is to spend some time reading genuine customer reviews as well as our own professional ones. There are plenty of reviews to be found online, you simply need to ensure that you’re always reading them from a reputable source.
Forex robots can analyze millions of charts far quicker than a human and generally, point your trades in a more positive direction. Although any robot is only able to perform as well as its program, the good news is that there are some great programmers around who have created the very best Forex bots. If you want to be sure your using a trusted and professional system, check out the recommended robots we’ve featured on this page.
It’s also important to remember that successful trading requires a large amount of human research and observation, although this can certainly be aided with the right Forex robot. Robots are great at picking out positive trends and trading signals at much quicker speeds than humans, yet their usefulness can also be undermined by malware, hacks and bad design.
To use Forex robots effectively, you should always employ your own trading knowledge, in addition to putting trust in the robot itself. There is definitely evidence that proves that trading with the help of Forex robots can be advantageous, but you also need to exercise your own diligence and patience.