It’s no surprise that so-called “forex robots” have become ubiquitous in the world of forex trading. After all, our world becomes more digitized every day, and our thirst for new technologies appears unquenchable. With technology enhancing almost every aspect of contemporary life, it’s as much a given that forex traders would want to avail themselves of every technology hyped to give “an edge” as it is that the makers of such technologies would want to sell them. So where’s the problem?
Forex robots, also called “electronic assistants”, are software programs that when enabled by you, trade for you automatically according to parameters set by you. Multiple makers and sellers of such robots want you to believe that you can vastly increase your trading profits simply by buying and installing their programs, however, approach these claims with a healthy dose of common sense: while there’s no doubt that proper usage of such robots can help you to pad your bottom line, it’s clear that excessive reliance on robots can potentially cause the exact opposite of the desired effect, and many novice traders have seen their profits and capital wiped out due to placing undue reliance on these “assistants”.
The highest and best use of a forex robot is obtained when its services are implemented as a back-up to your on-going trading activities. Because all robots are not created equally, find the one that works well with both your chosen currency pairs and your personal trading strategy. If utilized correctly, the robot will allow you to capitalize on advantageous market movements as programmed by you, and so can enhance your bottom-line by trading when you are asleep, away or otherwise unable to direct your trading activities as normal. In principle, forex robots operate by analyzing vast amounts of historical and current data, such that they can identify and spot trends based on this data, theoretically optimizing your trading activity; in practice, however, you must monitor their usage, because the robots are incapable of reacting to breaking news and correcting their movements in response to the effect that this news has on the currency market. You can “set it”, but if you “forget it”, then caveat emptor.
Forex robots cannot replace the implementation of sound trading practices based on research; rather, they are capable only of operating in a manner set and programmed by you. While their use might serve to help increase your trading profits—these robots are, after all, immune to the vagaries of emotional decision making—you must ask yourself whether it’s truly necessary that your account remains active 24 hours a day. It’s best to utilize the robot’s capabilities to enhance your own activities, instead of relying on them to replace you. Skeptics would agree, emphasizing the fact that if these robots were indeed capable of increasing your returns multiple-fold, their sellers would have no need to waste their time marketing them, since they would have become so wealthy from their use that they’d hardly be interested in the incremental income to be obtained from their sales and marketing.
The bottom line is that forex robots, if used properly, most likely can add some small degree of value to your trading activities if properly monitored and re-programmed by you when market movement so dictates. They’re no replacement, however, for good research, good position management and common sense.