Technology gives us something useful all the time. In the world of forex trading, we got forex robots that can automate trading decisions. Of course, the most popular trading robots are built around the MetaTrader, which is the most popular trading platform for Online Forex Trading traders.
These robots serve as expert advisors and they can do nearly everything. They can give you a signal to place a trade and manage the trade for you automatically.
The Pros and Cons
If you’re the type of HQBroker Trading Benefits trader who has a strictly mechanical trading system that can go on working with very minimal human intervention when it comes to the decision-making process, you can program you forex robot to trade for you 24 hours a day.
Nowadays, a lot of companies create and sell forex robots. But, of course, you need to be careful when choosing if you’re really planning to buy one. It’s not really rare for a company to spring up overnight and start selling forex robots, and then disappear after some days.
In reality, a huge portion of the total made-for-purchase forex robots aren’t really profitable. This means if you’re serious about automated trading, you must do huge research first before paying for a forex robot. It is imperative for you to be careful because there’s a great amount of curve-fitting or data-mining bias in such offerings.
Data-mining bias can be considered as an enemy for many traders who buy forex robots. Data-mining bias is simply the process of cherry-picking the best backtest out of a hundreds or more, and then presenting that backtest as the most likely outcome for the buyer of the forex robot.
Those things mentioned above shouldn’t in any way negate the success that many other trading robots have achieved. Most of the time, these systems maintain an edge and manage risk successfully. They’re less about high win rates and have more to do about position sizing and cutting losses quickly.
Meanwhile, automated trading successfully minimizes emotions throughout the trading process. By keeping emotions subdued and controlled, you can normally find it easier to stick to your plan. Since the trade orders will not be able to back off and question the trade.
Aside from giving some traders a push when they’re too afraid to ‘pull the trigger,’ automated trading can also slash the number of those traders who are prone to overtrading—or buying and selling at every chance they see.
Needless to say, automated trading also preserves trading discipline. It makes you follow the established rules. You can be disciplined even in times of highly volatile markets.
Automated trading can offer a lot of benefits to traders who are serious about making money in the forex market. It can bring riches and fortune to those who know how to handle such stuff and who are careful enough.
However, one should remember that automated trading may not really replace carefully executed trades. This is because mechanical failures do happen, meaning the systems still require careful monitoring.