Forex robots (autotraders / expert advisors)

Introduction

Internet has changed the way we trade in a forex market. In the earlier systems of trading, the trader had to either call up the authorised dealer (A.D) over the phone or in person and ask him to buy or sell one foreign currency for the other. With the advent of internet, several independent A.Ds have developed internet based platforms with several user friendly features, whereby you can buy/sell forex hassle free on the internet. What earlier started as a platform for buying/selling forex has now gone one step ahead and is called the ‘Automated forex trading’.

What Are Forex Robots?

Forex robots are a piece of a computer program that automates forex trading decisions on behalf of a forex trader. The system is built around a set of forex trading signals that assist in determining whether to buy or sell a forex pair at any period. Human beings are naturally emotional, and when it involves money, emotions can get to extremes. That is why forex robots can provide an advantage in helping to eliminate the potentially damaging influence that emotional actions may have on trading outcomes.

Majority of forex robots in today’s market are based on the MetaTrader platform and are designed using the MQL scripting language. Forex robots can do anything from generating signals to placing and managing trades on behalf of a trader. Traders who prefer a strictly mechanical forex strategy can program their forex robot to execute trading decisions on their behalf ‘round the clock. Forex robots can be bought from companies who create and sell them online. Alternatively, traders can develop their own automated trading systems by opening an account with a broker that supports the MetaTrader platform. Afterwards, a trader can experiment with developing the MQL scripts themselves.

Types of Forex Robots (Autotraders / Expert advisors)

Before you invest your money into a forex trading robot, it is important that you know in advance the kind of forex robot that you wish to trade with. Each of these robots is designed to work differently from the other. The types of robots include:

  • Fully Automated Robots: Automated trading systems are built to execute trading decisions without any human involvement whatsoever. They automatically scan the forex market for profitable trading opportunities to take advantage of. Automated robots are based on pre-set trading strategies or parameters that instruct them to do everything for a trader. The program is intended for traders who are usually busy with other businesses and do not have the time to spend watching the movements of the currency markets or keep up with news and world economics.
  • Semi-Automated Robots: Semi-automated trading systems, on the other hand, are used to trade manually. These kind of trading systems are designed for traders who can watch market movements every once in a while. The program conducts trades automatically when instructed to do so, and hands over control to a trader whenever they wish to execute trades manually.

How Forex Robots Are Used

In a market filled with traders that possess varying levels of proficiency, different trading strategies, styles, and systems are employed. One thing that does not change, however, is how these robots are used. As explained above, you can either get one from the companies selling online, sign up to a broker that supports the MetaTrader platform which you can use to develop your own trading system, or sign up for a copy trade service where robots trade accounts automatically.

  • Buy from a company online. Some businesses specialize in creating and selling forex robots. Traders who prefer to enter the market to get one can do so by buying a made-for-purchase robot. However, we encourage traders to do some research on the company they intend to buy from paying for the services. There are many scam programs out there that do not work as advertised.
  • Develop your own automated trading system. Rather than take a risk on 3rd-party forex robots, a trader can develop one of their own. The application can be developed using MQL scripts on the MetaTrader platform. After developing the system, the trader conducts a backtesting to see if the software performs well. If it is assessed to run efficiently, a trader can then test its effectiveness in live environments, after which they can ram it up with real capital.
  • Sign up for a copy trade service. Traders can register with firms that provide copy trading services where they can automatically copy trades and mirror the trading activities of successful traders.

Process of Using a Forex Robot on the MT5 Trading Platform

The MetaTrader 5 trading system features the MQL5 Wizard which can be used to program forex robots. Every Expert Advisor (EA) contains three modules including money management, signals, and trailing stop. This allows traders to construct automated trading systems based on their preferences. All a trader has to do is configure the desired parameters like trading signals the EA should respond to, the money management system that should be used, and how the trailing stop should be implemented. After compiling the program, traders then test the EAs that they have built and optimize them by selecting the best parameters. Once this is done, and everything has been certified to work as they should, trading can then be carried out in line with the selected algorithms.

Process of Signing Up with a Copy Trading Service

Signing up with a copy trading service is simple and straightforward. Here are the few steps you can take to sign up with a copy trading service successfully:

  • Find a trusted and regulated broker. Finding the right broker to trade with is the first and one of the most important steps in copy trading. To be successful, you need to register with a company where your detail will be completely safe, and your funds kept in segregated accounts where their safety is guaranteed.
  • Register with a broker. Having found the ideal broker, you register for an account by providing your personal information and following the prompts to complete the account opening process.
  • Select an account type. After deciding on which broker to trade with, next, you will need to determine the type of account you wish to operate. Most reputable brokers offer accounts such as MQL Signal Services, ZuluTrade, and Mirror Trader. All these accounts allow you to execute automated trading.
  • Select a signal provider. Upon activating your trading account, the system will generate a list of signal providers for you to pick a suitable one from. Choose your preferred broker and proceed to commence trading.

Advantages of Auto Trading

The benefits of auto trading include:

  • Auto trading helps to keep emotions in check since there is no place for human involvement.
  • The removal of human factors such as emotion, impulsiveness, greed, and irrational fear of losing, helps to ensure that trading discipline is preserved.
  • Auto trading helps ensure consistency.
  • Auto trading allows a trader to diversify trades, thanks to the multi-tasking capabilities of the computer.
  • Backtesting. Auto trading allows for backtesting, which enables traders to assess the viability of trading rules by applying them to historical market data.

Conclusion: Forex Robots: Best Practices for Usage

Forex trading robots are indeed an incredible tool in the financial space. Becoming a successful forex trader means being disciplined regarding the use of tools and being dedicated to the best practices of usage. The best way to make profitable trades with any system is to know a lot about it. Try to read online reviews about any program before deciding on whether or not you should get it.