A Forex Trading Robot is a computer program set to trade Forex based on trading signals that determine whether to buy or sell currency. The idea of using a program like this is to take the emotion out of Forex trading because trading based on your emotion can be a dangerous way to trade.
Forex Trading Robots are usually purchased over the internet through a brokerage firm. It is important to note that sometimes there is a lot of risk because a company can sell a Robot, and then disappear. A Forex Robot can be a risky purchase and some traders chose to build Robots for themselves. These programs are usually built using the MQL scripting language on the MetaTrader platform. To build your own Forex Trading Robot, you would open a demo account and then experiment with different MQL scripts.
Developing a Forex Trading Robot is basically setting rules and based on your trusted Forex Trading Strategy and then automating it. Once you have determined stop-loss and take-profit rules, you should be able to set up your trading platform to trade automatically. Obviously, your Robot should be based on rules that performed well in back testing and demo trading.
Another positive aspect of Forex Trading Robots is they limit the time a trader needs to spend working at Forex trading. It is an extremely convenient way to make sure your Forex trading continues whether you have the time to devote to it or not. It does take time however to choose the best robot, currency pair and time frame for your trading. Using a Forex Trading Robot is not an effective way to get rich quick without doing your homework.
The fact that there are calculations and types of chart analysis that are much easier for computers than people can be another significant advantage to using a Robot. The combination of these quick evaluations and the parameters the programmer sets can make a Forex Robot work well.
There is a lot of controversy surrounding Forex Trading Robots. The federal government would classify them as scams. The records of these robots can be sketchy because it is not always clear what their claims are based upon. Most reputable news sources would not recommend them either.
Of course, if you do choose to use a Forex Trading Robot, there are many things you can do to protect yourself from disaster. First, do your research. As with choosing a Forex broker, make sure you read actual testimonials from actual customers. Confirm that the sales claims are verified by real people. Once you decide to purchase a Robot or even create your own, it is still extremely risky to rely completely on automation. If there was a Robot that worked so well that the trader did not have to work at all, then the person who developed it would just use it themselves to get rich with no effort and probably would not share it with the world. So, although Robots might be useful to some traders, they are definitely not the clear-cut way to trade Forex successfully.