If you’re a novice trader you may be wondering do automated trading robots work? The simple answer is YES. Robots are automated applications with a set of rules to help you execute trades with little effort. Some can watch the price movements and scan numerous charts even when the trading direction is not clear. With the right system, you can achieve a high level of success while minimizing the risk. Although most forex robots promise profitable trades, finding a good one can be a tedious task. Read on and learn more!
Effectiveness of Trading Robots
Trading robots do not guarantee 100% profit but can help you make the most out price movements. These programs are easy to use since you don’t need any prior knowledge about the market. You simply download the program, install it, and you’re ready to go. Ideally, trading requires a lot of research to help find positive trends and trading signals. If a robot can help you make money trading currencies, the developers should use them in their forex accounts. It’s worth mentioning that there are genuine trading robots out there that can give real money in the long-run.
The Best Forex Trading Robots
Most systems come with a remarkable service guarantee, but that does not mean they are faultless. This is a vital element tool to help you achieve success. The easiest way to assess profitability is by taking a hands-on approach to identify how the software suits your trading strategy. Start by downloading the trial software and perform a back-test on your trading platform. That way, you can evaluate the potential profitability of the robot. A genuine trading robot comes with a free trial subscription. Also, the developer should give a satisfaction guarantee so that you can test it before you commit funds to a live account. Virtually all systems are based on a technical approach, so they tend to work in a similar manner. The buy and sell signals are based on historical and present data.
Benefits of using automated forex robots
It’s estimated that 90% of forex traders lose money. Timing is an ingredient for success. A robot is a great tool for identifying the entry and exit points when trading currencies. Depending on your risk appetite, you can use the system to execute a trade based on pre-determined signals. And because the currency market is open 24 hours a day, a robot can execute trades in the middle of the night. Secondly, it allows for programmability.
The technical parameters are adjustable which means you can change the profit levels, risk levels, and other variables. Thirdly, it eliminates the human emotional factor. If you’re a beginner, you can get emotional in your trading journey. But with automated software, you can get rid of the psychological pitfalls. If you invest in an accurate program, you won’t miss a great opportunity when you’re not on the trading platform.
Automated robots can help you diversify your trades. You can have a perfect mix of the majors and cross currencies. Spreading your risk is a great way of increasing your portfolio. Also, these programs come in handy if you have more than one forex account and you want to open orders at the same time. But even if the program has the ability to dissect data, you should not leave the trades unchecked.
How to identify scams
A trader can do everything possible to minimize risk and maximize profit in the foreign exchange market. But the biggest disadvantage of a trading robot is that there are a lot of scams. It’s unfortunate that many developers give inaccurate information about products profitability. A lot of investors lose money after using them because this is just a marketing gimmick. Although a robot can scan a multitude of charts in seconds, more than 90% turn out to be incorrect information.
Sometimes, the software will respond to false spikes that a real trader can filter out. A robot can perform complicated tasks but is not good at exercising good judgment. There are many traders out there who have lost their trading account from automated trading. For this reason, you should not rely on forex robots 100% when executing trades. While an automated trading program can be profitable sometimes, the only people who make a lot of money are the developers. Here are a few tips on how you can identify scams.
- Avoid forex robots that guarantee 100% success rate
If the preferred system guarantees a high success rate, that’s a red flag. The truth is that for you to realize high profits, you must hold on to losing trades for a long period. This could mean that you’re not trading with a stop loss which can lead to a margin call. A system that shows 70-80% win-loss ratio is more realistic. This is because the forex market conditions change constantly due to the manipulation of large traders and central banks. No program can take this information into account. If someone markets the product as set-and-forget, the robot could be for scalpers. Most of these automated systems perform poorly in the long-run.
- Stay away from programs that don’t show data in live trading accounts
Although demo accounts can help you harness your trading skills, you should only test the effectiveness of a robot in a live account. This is because the data feed on a demo account may not be accurate in terms of trade execution. Any serious developer will show a live trading statement. He should also allow you to test the accuracy level in your live trading account. It’s important that you scrutinize everything before you commit your money. Don’t hesitate to ask any questions. And because there’s no automated trading system that can give a 100% win-loss ratio, the robot may require some monitoring.
What to do before you buy
Just like everything else in life, a robot has no guarantees. It’s important that you crosscheck all the information before you make your investment decision. Read the terms and conditions and confirm the developer offers a money back guarantee. Next, check third-party sites for reviews to get an idea of what others are saying about the product. Does the robot come with a trial period? Most scammers won’t offer a free trial.
Whether you’re a beginner or an advanced trader, a robot is a vital tool in your trading arsenal. Make sure you do some technical and fundamental analysis before you execute a trade. Keep in mind all forex robots are not the same. This is why you should do your homework before choosing the best-automated system. With the right trading robot, you can join the 10% group of profitable traders.