When you look at trading foreign exchange online you may come across the option of automated forex trading systems, or forex robots. Before choosing to use these convenient items, it is suggested you read some information about them. You should know what a forex robot is, how you utilise one and whether online trading is more profitable when using a robot. Only once you have explored all these aspects will you be able to make an informed decision about using automated forex trading systems.
The automated forex trading systems
The forex robot is a forex computer software system that executes trades on your behalf. However, these trades do not just ‘happen’ they are based on information you provide. The parameters you place will determine when the robot trades and what positions it must look for. Based on these settings, the robot will automatically place positions on the forex market throughout the set time period. These automated forex trading systems are an ideal way of trading if you have minimal time to trade or do not wish to engage in manual trading.
Trading forex online with robots
The term ‘forex robot’ is actually a broad term for various online forex trading systems. While the robot may be the software system that calculates when to trade on the parameters set, there are other forex trading robots available. These alternate robots work slightly differently yet still work at trading on your behalf.
The information you are required to set will vary according to the robot you are using. Certain robots require more information than others. It is important that you outline the entry and exit points of a trade as this identifies which position must be traded. However, if you do not have the time to complete market analysis you should consider a fully automated robot. These robots will analyse the fore market and identify all aspects of the trade including entry and exit points. It is advised that you approach these systems with caution as you can lose vast amounts if they experience technical faults.
Are forex robots profitable?
One of the primary questions regarding forex robots is whether they can make a trader money or not. The answer is both yes and no. While it is possible to make large amounts of money using a forex robot, it is also possible to incur detrimental losses.
To see if the robot in question is profitable you need to test it over a prolonged time period. This can be costly as you generally cannot link a forex robot to a demo account. This means you will have to trade on the forex live market in order to test a robot. Every company selling automated forex trading systems will inform you that they are profitable but you will only be sure after testing.
Another way of determining profitability is through online research. By perusing reviews and discussing the option in forex forums you should gain an idea of the robots ability to make money.