The automation of traditional technologies is a process already underway, it affects both classic industries (production, HoReCa, tourism and more), as well as the financial area that was, until a few years ago, defined by offline processes and operations.

Trading robots, to be precise, have recently become an extremely attractive tool for those who want to make quick profits. From how it works to the types of advantages or disadvantages that a Forex trading robot brings, this article will capture everything you need to know about it.

What is a Forex trading robot?

The Foex trading robot is neither more nor less than an automated trading software. He single-handedly places orders on the exchange, strictly following his programming code – which allows him to open and close trading orders 24 hours a day.

The most common Forex trading robots are MetaTrader Expert Advisors, which provide trading signals and automatically execute market orders. Even so, the varied offer of trading robots in the market also brings with it financial risks.

Extensive knowledge about trading, but also about the volatility of the financial market, is an important step in making the right choice in terms of the right trading robot. Ideally, knowing the working details of the robot, but also the danger of over-optimization will help in choosing the right auto trading robot.

How to choose a Forex trading robot?

Choosing the right trading robot for you is not easy, you have to follow several steps to guarantee chances of success. Even though there are a multitude of Forex trading robots available on the market for a fee or even for free, documentation is an unwritten law.

Downloading a free trading robot is of course the most convenient option. Even so, you should know from the outset that most EA robots – available on the MT4 and MT5 platforms – are programmed to deliver results only for a defined period of time.

The number of transactions taken with the help of the free trading robot is also important in making the final decision: the more positions you have, the more commissions you will pay. Even so, there are trading robots that are optimized in such a way as to ensure as few commissions as possible for entering or exiting a position.

Estimating gains and losses is also part of the selection process. You can thus calculate the potential rate of the risk/reward ratio, which should ideally be greater than 1.

The success rate gives you perhaps the most important selection criterion of the trading robot: you will know instantly if the robot you are following will register more positions in profit or, on the contrary, in loss. Aim for a success rate greater than 50% for the initial period.

How to create an automated trading robot

Very simple – to explain, not to implement. You can create and program your own EA or, lacking the necessary knowledge, you can call on a professional programmer to take over this operation.

The knowledge you need to have in order to program your own EA by yourself is quite complex: the programming language of the trading platform you want to use (MQL4, MQL5, C++ or others), practical tests and thorough analysis ability to optimally interpret the received data.

How does an automated trading robot work?

The Forex trading robot will run according to the lines of code you wrote or the programmer you called. Among the conditions entered into the robot’s code are looking for a buy signal if the price is higher than the average, opening buy or sell positions, and looking for sell signals.

It should be noted that Forex trading robots do not guarantee quick and easy profits – it is indeed an easy way to do this, but the way the robot is programmed impacts when it trades and when it refrains from doing so for reasons of risk.

How many types of automated trading robots exist?

They can be listed according to several categories: according to market, platform, analysis or investment horizon. Strictly speaking of the market, there are a. Forex Trading Robots, b. Binary Options Trading Robots and c. CFD Trading Robots. In terms of trading platform, Expert Advisors MetaTrader stands out in particular.

MetaTrader 4 and MetaTrader 5 trading robots are developed in the mql4 or mql5 programming language and are characterized by high execution speed, impartiality in decision-making and flexibility of trading programs.

Even so, flexibility can also turn into a disadvantage for MetaTrader 4 and MetaTrader 5: we mean its lack in adapting to market conditions. If the market becomes indecisive, the robot will start reporting losses.

Binary options trading robots especially characterize online gaming platforms. It is, at the same time, the market that has seen many scams and scams – that is why it is recommended that the choice of such a robot is made only after accumulating a solid set of knowledge.

Why choose an automated trading robot?

Constant self-education, thorough analysis, skill and patience are what ensure gains in the Forex market – trading robots, although extremely useful, fall into the background. Call on them to maximize your winnings and make your experience more enjoyable, but always rely on intuition and knowledge for your final decisions.

The Vestor trainers are still at your disposal with valuable know-how about Forex trading. Get in touch with us if you want to know more and discover our courses, which will introduce you to the world of trading.