In trading for profits on the stock market or “Forex,” there are trading robots, Forex robots, signals, auto experts, advisors, methods of copying transactions, and much more.
What are the automated programs, how do they differ from one another, what traders can gain in profit, the existence of financial risks when using them, the choice of automated forex software, and their feedback that the reader learns from this article.
Anyone who decides to make money from Forex should use specialist training. It should be noted that this is a rather lengthy process and includes the following “trading specialties”:
- Basics of financial market terminology.
- Commercial terms and rules.
- Money management.
- Market forecast.
- Trading psychology.
- Study technologies and business strategies.
- Tools, assets, and more.
Basic training is only a theoretical part, followed by mandatory practice on a private demo account. The demo version allows you to get the beginner’s first trading skills and get to know virtually all trading tools, or at least with most of them, to test and work on the chosen strategy.
Once the beginner starts receiving positive and stable statistics on a demo account, he can move to the actual market to make money, that is, to renew his deposit and start trading on his own.
The practical part usually takes at least two to three months, and the core course depends on the time the trader takes to study it. Many brokerage firms offer clients offline, that is, in the office, to receive free training.
Unfortunately, such courses are very superficial, which is not surprising since it is impossible to grasp trading basics in three theoretical classes and seven practical lessons. Therefore, many newcomers who do not want to spend time training prefer to use it in trading Forex robots, according to reviews that bring them positive results and allow you to profit in the foreign exchange market.
Advantages of Forex robots
What are the advantages of Forex robots programs? Traders’ reviews of Forex robots, as mentioned above, are somewhat contradictory, and each broker independently decides whether or not to use them in their business.
- Full automation. They open and close orders independently, and the speculator receives only profit or loss, which is not excluded, given that the risks in the financial markets are always huge.
- No deep knowledge of trading is required. Any new trader can use it. To do this, you only need to open a trading account at a brokerage firm, set the deposit funds, and assign a consultant, expert, or robot on a schedule. He will trade independently, and the speculator will earn income.
- According to traders, when using a forex trading robot, there is no need to spend time forecasting changes in market prices and studying analytical and statistical data.
It is essential to understand that there are no results with a 100% return. Periodically, when using commercial robots, negative transactions occur. The automated program is only profitable if there are more positive results than losing positions, measured by the number of points earned.
Disadvantages of Forex robots
Many factors justify negative reviews of Forex trading robots. Most often, traders highlight the following points:
- The number of losing trades is higher compared to profitable positions.
- Incorrect settings and options for automated programs.
- The use of trading robots without regard to the market situation.
Each automated program is based on mathematical calculations; most often, it is technical indicators. Any commercial robot relies on a strategy. As is well known, in trading at different times of a market movement situation, appropriate techniques are used, depending on the stage in which it is located.
For example, flat strategies are used for zone consolidation and trend techniques for sudden movements. Therefore, if the developers do not take these parameters into account, then the forex robot will open unprofitable positions in the opinion of traders since its algorithms use a technology that does not correspond to the stage of the market.
As a result, the trading strategy on which the robot is based will give false signals to enter the market, and thus, open positions through the algorithms of the program will bring losses to traders.
Types of automated programs
Trading is a complete science, and not every newcomer can master it in a short time, with a great desire to make money at present from the financial market. Therefore, novice traders use automated trading programs, which are of several types:
- Advisors, experts, and Forex robots.
- Copying transactions. The passive income method occurs when a trader connects to a trading account from a successful manager. Usually, a paid subscription is issued, and all transactions made by a professional are automatically copied to the junior terminal, where the position opens and closes. As a result, the trader does not have to engage in trade independently but also receives income.
- Trading signals are automatic conditional methods. The trader, who uses SMS or e-mail messages, depends on the conditions he chooses and gets points to enter the market. Signals can be configured for a specific trading asset and the date range that the trader is trading in. In the future, the speculator himself decides on the importance of this information. In any case, he has to open an independent position in the trading terminal, and the signal is only a ready-made analytical solution, most often logarithmic.
Robots to trade in a quiet market
All automated programs can be divided into two types: static advisors and trend trading robots. The manual version of the speculator independently performs an analytical forecast of the market’s movement and determines its stage. In the future, given his condition, he uses precisely the relevant strategy.
The quiet market is characterized by low volatility, as all movements in it are slow and slow. Any pulses, especially trends, are absent, and therefore, when in such a state, trading occurs in the sideways range.
During the consolidation zone, market prices can be fully predicted. They move from the top level to the bottom of the range, from resistance to support, and vice versa. Therefore, when choosing logarithmic math operations for a trading robot, these criteria and features of a quiet market are always considered.
Forex Robots with the correct settings only trade within the range of market quotes. However, with their incorrect settings, the trader will immediately receive a loss, as the program will not put a way out of the calm market condition and the onset of momentum growth.
As a result, due to the phase change and the quote out of range, the trade will be closed at Stop Loss, that is, with the help of a preventive order that limits the trader’s losses but does not exclude them.
Professionals recommend that before choosing an automated trading method, you carefully study the program’s parameters and features, review the automated Forex robots, and analyze statistical data with profitability indicators.
You should also consider the size of your deposit, as most advisors require large amounts of cash. In addition, you need to pay attention to the algorithms that the program is working on, whether Martingale is not used, which significantly increases the load on the filing and the protection order settings.