Forex Trading Robots, Explained

July 21, 2021 00:22 UTC
Reading time: 18 minutes

Forex trading is versatile. It seems that there are countless available trading styles, Forex strategies, and Forex systems. There are all types of traders and with different methods of working. One of the characteristic of Forex is the split between those who want to manually trade, and those who want to utilise automated trading with the best Forex robots. In this article I present to you everything you need to know about Forex trading robots, such as how they work and whether or not they are worth. I also review several forex trading bots for you.

What is a Forex robot?

What is a Forex trading robot? Automated trading requires a lot of research to find the right software that will perform trades correctly. Sitting back and letting an automated device perform the work for you can be a real temptation, and it's here that Forex bots come into play.

A forex bot is a computer program that is based on a set of forex trading signals which help to define whether to purchase or sell a certain currency pair at any particular time.

Trading bots are available 24/7 to Forex traders, and can easily be bought over the internet. It is important to understand that there is absolutely no such thing as the 'holy grail' of trading systems. There is no forex autopilot trading robot that you can turn, got to sleep and earn profits with.

So, are you asking yourself, "Do Forex bots work?", or "Will choosing one turn out to be just another commercial scam?" Stick around, we've prepared this article in order to address these questions and find out the best Forex robot in 2021.

How to use a Forex robot

How does a Forex robot work? Let me explain how to use a Forex trading robot.

FX traders want to use the best Forex bots because they hope to make easy money from the Forex market, without having to devote a lot of personal time to it, or do anything manually. They hope to find something that works on autopilot without requiring attention from the trader. Those who use them have to find a good currency pair and the perfect time-frame to trade in it to maximise their profits.

Some Forex bots are capable of scanning numerous charts in a way that humans physically can't. In addition, they are developed with particular parameters needed in making trade decisions. With implanted trading signals, they determine when it is appropriate to trade, or conversely not to trade.

This is why many traders become attracted to them - they seem like something you can turn on, walk away from and earn profits without having to manage any aspect of it.

The best Forex bots suggest solutions to find profitable trades even in unstable markets, when the actual trending direction is unclear. They will follow the best trend to enlarge profits, and perhaps eliminate the chances of potential losses.

Trading against the trend will eventually lead to loss after loss, whilst trading with it increases profit, no matter what method or bot is used to trade. This is why it can be dangerous to treat these pieces of software as forex autopilot trading robots.

However, what must be remembered is that the majority of bots trade within a certain range. They make a particular amount of pips inside the tight range, during the slowest time on the Forex market, and they regularly set a few pip targets, and may not even use a stop-loss. They can be classed as successful, as they do tend to make profits in each trade, even if it is only a few.

When an unanticipated and strong range breakout occurs, it wipes out the small profits that they have made. Some bots that are promoted as the best Forex trading bots can earn profits in a positive trend, although they may lose money in a choppy FX market, so finding a great trend to follow is essential.

The effectiveness of Forex robots

Do Forex trading robots really work? Though forex auto trading robot software promises to make beneficial trades, not all automated forex trading robots are what traders expect them to be.

Moreover, some federal governments consider bots to be scams. In a similar way, you are not likely to find any article in Forbes, the Wall Street Journal, or any other respectable news source promoting them.

What's more, even online trading bot merchants try to move their bots in rank by claiming that their opponents' ones are scams. A lot are advertised with false claims by people who have made serious money applying these systems.

The truth, however, is that a great number of investors and traders have lost a lot of money using so-called 'free' Forex bots that work. There have even been circumstances in which whole accounts have been wiped out.

If you really want to know how effective bots are, you should check out reviews and authoritative testimonials online. Although they can scan millions of different charts within seconds, most often 90% will turn out incorrect information.

This is understandable - because FX bots are a form of artificial intelligence. Even though they are capable of performing highly sophisticated tasks, and many at once, every Forex bot is still incapable of creative thinking. They cannot imagine what may take place in the near future, as their functionality is restricted to how they were initially programmed, as well as past performance.

For traders who use forex auto trading robot software, they should not fully depend on it to conduct all of their trading activity. Ultimately, trading demands a considerable amount of human research and observation.

Additionally, humans can actually follow up on diverse economic conditions and keep up with the news in the financial world, unlike automated forex trading robots. Forex bots can solely find positive trends as well as trading signals, but occasionally their functionality is unfavourably affected by either unstable trends or false information.

In addition, hackers and viruses may also hinder bots. All in all, automated FX trading software, or Forex bots, are nice opportunities for their designers to make money, but offer little benefit to you as a Forex trader. It is a debatable question - will a bot make you rich, or will it just wipe out your trading account?

Are Forex trading bots legal?

Perhaps you've thought to yourself, "Are they legal?". The short answer is, yes. But it's not so cut and dry. There aren't currently any concrete laws that forbid or permit the use of these automated trading tools. As such, they aren't declared illegal by law.

But keep in mind the existing laws surrounding daily trading. Some countries have restricted or forbid trading forex through online brokerages. So, trading via one of these bots in such a country could bring you face to face with legal troubles.

Are Forex trading bots profitable?

Are Forex trading robots profitable? One thing is likely - developers of forex auto trading robot software can potentially become millionaires. Smart designers are aware that people yearn to make a lot of money, and try to ensure that robot Forex trading appears to be one of the finest ways that they can achieve this.

Nonetheless, they exploit this as a possibility to design a bot, or any other software (or even a DVD, webinar, seminar, e-book etc) to sell and prosper.

If the bots they sell could actually make a huge amount of money through trading the currencies, then what is the point in selling them to others and not utilising them on their own Forex accounts? The answer is logical - bots can barely make money for a Forex trader.

Can a $99 FX bot or a free Forex bot really make hundreds or thousands of dollars every month? If it could, you have to ask yourself - would it really be sold for such a relatively low price?

If it was this easy to earn money utilising these automated systems, nobody would ever go to work. It is possible that bots can make money for a restricted time period, but they could start losing after a while - and the money earned by the 'best Forex bot' with one position may disappear before you can claim it. In addition, the vast majority of bots are scalpers.

They make just a few pips with every position they take - and they can set a considerably tight target. The chances of surviving with such a strategy are quite limited for a trader.

Successful FX trading is based on knowledge, proficiency and skill. It involves analytical thinking, and something visual. When looking at what are Forex bots, it is clear that they cannot properly work in this manner. Market conditions tend to change all the time, and only an experienced Forex trader can distinguish between when to enter the market, or when to stay away.

To get a deep understanding of Forex robots and how to use them in your trading, have a look at our webinar below with professional trader Jens Klatt: 

Best arbitrage forex robot review

Westernpips Private 7 Software is a full-featured Muliterminal - a latency arbitrage forex bot. It has built-in algorithms that execute automated trades on any forex broker. It does so without opening the Meta Trader 4/5 terminals. Instead, it uses technology for direct trading access to different servers via a TCP connection.

With this software, many opportunities open up to you. You can capitalize on connecting both fast and slow brokers in any combination. You can execute trades and fast quotes on FIX / API / ITCH protocols. The order execution speed using this new technology is about 15 to 70 ms faster and every order looks like it was placed manually.

It is worth noting here that with latency arbitrage, principle traders are able to capitalize on the ability to connect to exchanges faster, relative to other participants in the market.

I couldn't find this Forex trading robot's price, so I can't say if it's free or paid.

Top Forex hedging robot

The Hedge Forex Robot is a fully automated robot software for forex trading that trades based on a hedging strategy (this means buying and selling at the same time) paired with trend analysis.

This bot is appropriate for both beginners and advanced traders, due to its simplicity in use and set up. It can be set up in a matter of minutes. It is fully automated and comes with easy-to-understand, step-by-step instructions.

The price of this bot is usually around $199 USD, so this is not a free Forex trading robot software.

It is always a good idea to be careful when you are trading with hedging strategies and remember to check with your broker to ensure that they allow hedging.

Top forex scalping robot

A scalping bot will be placing frequent trades on your behalf throughout the day. So, you'll want to find a high frequency trading forex robot. In order to find one of the best forex scalping robots, there are several factors that need to be in order for the scalping bot to work. Traders sometimes find themselves asking, "Can they really work?". They can, but, unfortunately, the answer is not a simple yes or no.

When searching for a high frequency trading forex robot, some traders might head to Google and type in "best forex scalping robot". Unfortunately, in the case of scalping bots, this can be dangerous.

Here are some key points to consider when searching for a high frequency trading forex robot:

  • Your broker account is a key component of whether your scalping bot will be effective and beneficial. A bot will not work if the conditions of the broker are such that they serve the broker, regardless of how efficient and effective a bot is. Perhaps, you can negotiate this point. Sometimes, if you have a big enough deposit to start, it is possible.
  • The bot: it must be good. It is important to avoid bots that use grid and martingale strategies (these are sometimes also known as marti-grid).
  • Be sure that the vendor is capable of showing you a live account. This is important, however, it cannot be a 100% reliable way of proving the performance of the bot, as brokers and EA vendors can cooperate on creating fake accounts to show high sales that aren't, in fact, accurate.
  • Look for a free trial. If a company has a solid product, particularly in the bot market, there is not reason for them to not offer a free trial. If it is as good as it is marketed to be, then it is not uncommon for the provider to prove it to their potential clients through a free trial. e first.

Whether you are searching for a traditional form of a scalping bot or you are searching for the best forex bot for android or your iOS device, these points are important to consider in any situation.

When looking at the big picture, it is difficult to find a reliable high frequency trading forex robot. There is a bot in MT4 called the 5 Minute Scalper Metatrader 4 Forex bot. This is free forex trading bot software for scalping.

I am going to leave you with this (which, unfortunately, will only be of use to more advanced traders): one of the best ideas is to develop a scalping trading strategy of your own and then pay a professional to code it in MQL.

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How to Write a Forex Trading Robot

There are two options for getting a bot. You can buy them or download them for free, or you can build a custom one yourself or hire a developer to build one. Let's discuss how to build a Forex trading robot.

The finance industry recruits as many programmers as it does because no number of human traders could carry out as many trades as quickly as bots do, and programmers can create custom trading bots designed specifically to a traders requests.

There are two ways you can get a custom Forex bot:

  • Create and program your own forex bot, or
  • Use a professional developer

If you choose the first option, you should bear in mind that you will need to learn the programming language of the trading platform you use.

Some trading interfaces have simpler and easier-to-learn programming code than other platforms. The language in MT4 is relatively more simple to learn than most, with a lot of documentation available online to help you succeed in programming your forex bot for MT4.

The MQL5 website (the language used in MT5), in particular, is full of very useful information.

Once you have a forex bot installed in your trading platform, you should begin by testing it, with:

  • Historical data with MetaTrader strategy tester
  • In a free demo account to see how the automatic trading bot reacts in real conditions and in a safe environment.

Only when you verify that the operation of the forex bot is identical in historical data as it is in real-time data, can you ensure that it is working properly.

Conclusion

We have described the aspects of applying forex auto trading robot software in trading from a rational point of view. What we hope can be concluded from this article is that instead of spending your time and capital on things like automated FX trading software bots, it would perhaps be better to devote time to learning a good trading system.

Eventually, you may become a professional trader who relies on experience and knowledge, rather than using computer algorithms and codes by someone who is not a Forex trader at all. It is completely up to you whether Forex bots are worth your attention - and only you can answer the question: Do Forex bots really work?

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This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of, or recommendation for, any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks

 

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