What is Forex Robot?
Forex robot also called as Expert Advisor, it is a computer program that is automatically analyze the market and decide to buy or sell at a given point. So it analyzes and also execute the trades.
Forex robot is designed to eliminate a psychological factor of traders like emotion, afraid and bad feeling. It also eliminates inconsistency and missed of opportunities.
Because with Forex robot you can catch every moment as long as they matched with the robot’s algorithm.
Forex robot implementation
Most of forex robot are built for MetaTrader by using MQL scripting language that enable traders to get signals for high-probability to win trades.
Purchasing Forex robot
There are so many forex robot in the market, but only a few are reputable and legitimate. Over 50% of forex robots are over promised and caused of big loses to the traders. That’s why it is highly recommended to purchase forex robot only at reputable companies or marketplace or read solid reviews first before you choose the one to buy.
What need to keep in mind
Before you buy any forex robot (including forex indicator or forex trading system), please keep in mind that there is no such thing as holy grail in forex trading. Even veteran traders with ten of years of experiences have never seen a holy grail system that never fail in forex market.
So whenever you find a forex product (system, indicator, robot, script) that is promising to give you 90% – 100% winning rate, please stay away from that offerr! That is an offer that just tried to get your money. They will never deliver such promise as the market itself can not be predicted that accurate by anyone or any system.
Developing your own trading robot
What if you have a solid trading strategy that was created by yourself, and you want to make a robot based on the strategy?
There are at least 3 options you can choose:
- First, you can order to an MQL programmer.
- Second, you can learn the MQL programming. This option is not recommended of course.
- Third, you can try some EA builders. With EA builders, you can make an EA without knowing MQL programming. For sure, not for a highly complex robot alrogithm.
What factor need to consider when you choose the best forex robot?
- Trading style
You need to choose the right robot based on trading style you prefer. For example, if scalping is the best fit trading style for you, you should choose scalping robot, not swing trading robot.
- Backtesting result
Check the backtest result for at least 10 years. Check for all pairs the robot could trade. What you are looking in this test is not an amazing result (high ROI), but the main point is its stability.
Check the graphic. A good trading robot has smooth growing graphic of equity growth.
- Stop loss and take profit
Some traders are okay with positions with no stop loss. But it is not recommended. Taking a position without stop loss means you risk all the money. If you still want to use the robot, you can split the money into several accounts. So when market crashed and that caused you to get margin call, you just lose the money in the account. Not all of your money.
Some forex robots used stop loss at background or hidden stop loss. It is okay as long as you place the robot on a good server (a very good up time server).
- Hedging, averaging and martingale
It is recommended to choose robot with NO hedging, averaging or martingale.
These are what most caused traders got their margin call.
If you have to choose several robots and all of them are using averaging and martingale, choose the one with limited number of averaging positions. One or two max positions of averaging should be the most.
Beware with the robot’s drawdown. Drawdown means the difference between a high point and the low point in the balance of your trading account. Do not take a robot with drawdown level of more than 10%.