In the trading market, people have always been looking for new solutions to make trading as effective and profitable as possible.
For that reason, large players, as well as small companies and individuals in the trading business are turning to Forex trading robots – automated systems that will help them to maximize their profits. And while some swear by the success of Forex trading robots, others believe that such automated systems will never be able to replace the decision-making process of humans.
The question is – if you want to make a profit from forex trading, should you do it with the help of Forex trading robots (often referred to as bots), and are Forex trading robots really profitable?
This article is designed to give you detailed information and provide guidance, so you could learn more about what to expect from such trading programs.
What do Forex trading robots do?
Before we start talking about all the pros and cons of Forex robots, it’s essential to understand what they actually do, and how such automated systems can help you to gain profit in FX trading.
Forex trading robots are software programs that are based on technical trading signals that help you determine when is the best moment to enter a trade (to buy a currency) or exit a trade (to sell a currency). They basically let you know when to take risks and when to stay away from a certain trade. If you have a strategy that’s strictly mechanical and doesn’t require any human activity in the decision-making process, they can even do it 24 hours a day.
There are many different types of FX robots, from the ones that will only send signals to trades, to top-rated Forex robots that use precise calculations to identify profitable opportunities, even when the trading directions are unpredictable or not too obvious.
Although the idea of such bots definitely sounds tempting, especially if you’re new in the trading business, it’s not that simple. The robot/software won’t be rolling profits into your account while you’re busy with your daily life. While there are plenty of scammers out there who promise such unrealistic solutions, the best Forex robots still require some regular human input.
Keep in mind that rushing into purchasing a bot, without learning how to distinguish a scam from the real deal will only cost you a lot of your time, energy, and money.
How do trading robots work?
When it comes to trading, there is no place left for emotions. Trading bots analyze the market through various advanced algorithms that trade automatically based on indicators. By trading with robots, the fully automated and hand-free system keeps you away from making the wrong decisions based on your emotional reactions.
Since they remove the psychological element of trading, the possibility of making profits can increase tremendously. Even the best human traders won’t ever be capable to completely shut down their emotions and that’s why they tend to use at least a sort of automated systems in their business.
Most of the robots are built with MetaTrader that allows traders not only to generate trading signals but also to manage their trades and place orders.
All you have to do is to download the robot trading file add it to your platform. Once you enable the file, it starts to scan the market and search for the best trading opportunities.
Are Forex trading robots really profitable?
It all comes down to what you expect. If the software is used correctly, it can help you to make the right trading decisions in order to increase your profit, but unfortunately, they can’t guarantee long-term profits in all ongoing trades. There are so many different variables that can affect movements in trading, that it is algorithmically impossible to program them all and include them in the predictions.
The commonly used way and the first step towards knowing whether there will be a chance of being successful is a method called backtesting. The programmers of the current best Forex robots use this method to ensure that their designed robots work properly and that they will be able to maximize profits.
For this purpose, the programmers use historical data to test how a trading scenario would play out in real life. However, if you decide to purchase a robot, don’t rely on the fact that the bot you want to buy has been backtested.
Many programmers and companies use just a part of their data as a marketing strategy to highlight their best results, without showing hundreds of other backtests that were irrelevant or had wrong predictions and calculations.
So, the answer to the question of whether trading robots are profitable comes down to your personal trading strategy. If you think about the trading robots as a great tool that can help you out with its automation systems which are programmed to carry out trades, and you use your previous trading experience to make the final decision about buying or selling a currency, then this software could be considered extremely useful and profitable. Remember, the key is to use automation as a tool to assist your strategy and not to have it the other way around.
Things you should know before purchasing a trading bot
If you’ve decided that you would like to try out if a Forex trading robot will do any good to your business, there are some things need to keep in mind before buying a trading bot. Here’s a list of things that should be considered.
Make sure to find out if the company that is selling the software is trustworthy
Many companies create and sell trading bots, but it’s extremely important to be careful when purchasing one. It’s quite common that a company shows up overnight and starts selling their robots while giving a bunch of unrealistic promises, including overnight success. They often even include a money-back guarantee. And then they disappear in about a month, together with your money.
Make sure to investigate a bit before making a purchase and choose a company that has been on the market for a while. Otherwise, you could join the extremely long list of people who unfortunately got scammed by fake companies.
If it sounds too good to be true, it probably is
Before you decide to buy a trading bot, ask yourself, “If it’s really good and works well, why is it being sold at such a low, discounted price?” It doesn’t mean you have to go with the most expensive option, but if a seller stands out with a much lower price compared to other companies, there’s a big chance that the purchased system won’t work well or won’t work at all.
Use a trial version first
If you’re still new in the trading bot or even in the Forex trading world, take the time to try out a trial version before purchasing the software. Many companies offer a trial period so you can use this as an advantage and try out trials of different companies in order to find the option that works best for you.
Use the Forex robot as an advantage to your personal trading strategy
While such robots can make great predictions based on the previously collected data, they still can’t beat the human experience and required trading skillset in many ways. For that reason, try not to completely rely on automated systems and make sure to do your research.
A Forex bot can be extremely helpful if you combine it with a well-planned trading strategy. Make sure to track your progress along the way and after you gain some knowledge and experience, with the assist of your Forex robot, you’ll be able to finally reap the expected benefit and profits that you were hoping for.
What if I still don’t want to rely on completely automated trading systems?
If you’re not quite convinced and think that robots are still inferior to an expert trader with years of experience behind him, then you will probably be interested to learn more about copy trading and social copy trading.
This type of trading doesn’t rely on robots, but on real experts that have years of experience and trading knowledge. Since all of the track records (of experts) are public, it’s a great way to learn more from the best current traders in the market and rely on their expertise.
Copy trading is a (strict) form of social trading that connects your account with the account of another trader. All of the trades get reflected in your account which means that all of their profits will also become your profits. On the other hand, all of their losses will also be equally reflected on your account.
A great thing about copy trading is that it’s quite simple since it doesn’t require you to do anything besides clicking the “copy trader” button. Although relying on the decisions of top traders and their wins is a great advantage, you need to be aware of the fact that their losses will also reflect on your portfolio, which is a downside.
On the other hand, social trading allows you to make trades based on the information you get from other traders, but you are the one that decides whether you want to do a trade or not, so you have much more control over your portfolio.
Since you’re making the decisions, the risks can be a bit higher and you may lose a lot in the beginning before you gain more experience. But if you think about it long-term, social trading could do wonders for your trading business.
If you like to be in charge of your finances, but wouldn’t mind getting the advice of experts, social trading could be a great option to start with.
In the end, it all comes down to what you are looking for. Keep in mind that taking risks is a part of the trading business, so losing money as a trader will happen.
And while taking risks is a part of the trading game, the ultimate goal is to win more money while risking and losing less. And that’s where our 500+ trading strategies step into the picture.
The whole history is insightful. A trader can choose a strategy by means of history (average winning trades) and profitability. We focus on trend-following systems that don’ have a super percentage of trades but instead focus on less expected, big profitable trades (so-called breakouts).
If you don’t have the time (or knowledge) to watch and follow the trading trends constantly and you’re looking for something that actually works, make sure to check out our website and start working with a system that will help you to finally trade like a master.