When trading on the Forex market, sometimes it’s tempting to just to sit back and let a pro or an automated device do the work for you.
This is why robots became popular.
Basically, robots and other forms of automated software, promise to make traders big profits with little or no effort on their part.
It’s just the lazy man’s way of trading.
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What Exactly Is a Forex Robot?
It is a software application specifically created to perform trades on the Forex market through computer automation.
Forex trading robots became so popular almost from 2007.
As far as I can see, some of them are still being sold and some new ones come every now and then.
The question is whether they really work and who buys them and why?
Can’t people trade on their own?
Do they really need an auto-trading robot to make money for them?
What Does a Forex Robot Do?
Their main goal is making easy money out of the Forex market, without doing anything manually or having to sit at the computer.
Most Forex traders lose and when they get fed up of losing, they look for the other ways as the solution.
And, robots look like a good solution at the beginning.
Robots users have to find a good currency pair and ideal time-frame to trade in it to maximize their profit.
This is what the robots developers let them know when they buy a robot.
Some robots are able to scan numerous charts and watching their movements all at the same time, which is beyond human capability somehow.
Also, robots are programmed with parameters needed in making trade decisions.
With embedded trade signals, they decide when or when not to trade.
Some robots offer solutions to find profitable trades even in erratic market chaos when the trending direction is unclear.
By following the best trend, they can maximize their profits and possibly eliminate chances of taking losses.
Obviously, trading against the trend leads to loss after loss while trading with it, maximizes profits regardless of the method or robot that is used to trade.
But wait a second.
Such a description can be seen on the websites that promote those robots.
Is There Such a Robot That Finds and Follows the Trends?
I am going to answer this question shortly.
Most robots trade within the range or sideways market.
They make some pips trading inside the tight range during the slowest forex market time, while they usually set a few pips target and either a too wide, or no stop loss.
They succeed to make profit in most of the trades they make, because they make a few pips in each trade.
But a sudden, strong and unexpected range breakout wipes out all the profit they’ve made.
Some robots make money in a positive trend but lose money in a choppy market.
Thus, finding a great trend to follow is crucial.
How Effective Are Robots?
Although Forex robots promise make profitable trades, they are not all they’re cracked up to be.
According to the federal government, most of them are scams.
Likewise, you’re not too likely to find articles in the Wall Street Journal or any other reputable news source that promotes them.
Even online robot merchants promote their robots by claiming their competitors’ are scams.
Many are advertised with false claims by people who’ve made money using these systems.
A great number of investors lost money using them.
In fact, some had their entire accounts wiped out.
If you want to know how effective they really are, check out reviews online.
All of the reviews are posted by the traders who have not been able to make any profit on their own, and so they use a robot to make some money for them.
Though they can scan millions of charts within seconds, 90% or more turn out incorrect information.
Forex Robots Are Only Robots
Even though robots can perform highly sophisticated tasks, they can’t think creatively.
Likewise, they can’t imagine what may happen in the future as their functionality is limited to how they were programmed to analyze the past performance.
For traders that use one, they should not depend on it to do conduct all their trading activity.
After all, trading requires a great amount of human observation and research.
Also, humans, not software, can follow up with economic conditions or keep up with the financial news.
Robots can only find positive trends and trading signals, but sometimes their functionality is adversely affected by jittery trends or false information.
Hackers and viruses might also hamper robots.
Automated forex trading software or robots are good opportunities for their developers to make money, not for you as a Forex traders.
They not only don’t make your rich, but they can also wipe out your account and blow up your trading capital.
But they can make the developers millionaires.
Smart developers know that people are eager to make money.
And, Forex trading is one of the ways people can follow to make money.
However, they use this as an opportunity to create a robot or software (or an e-book, DVD, course, seminar, webinar, …) to sell and make money.
If the robots they sell, could really make money through trading the currencies, then why they are selling them to others?
Why don’t they use the robots to trade on their own Forex accounts?
This can have less headache for them.
But selling a product has a lot of headaches, and is a lot of work.
The answer is they know the robots they create don’t make any money for the Forex traders.
They are the only one who make money through selling the robots.
Can a $99 Robot Make Thousands of Dollars Every Month?
If yes, then why do they sell it for a $99 one time fee?
If it was that easy to make money using the robots, now everybody would be doing it, and you wouldn’t see anybody on the streets going to work every day.
It is possible that a robot makes money for a limited time.
But then it starts losing.
In most cases, it wipes out all the money it has made, within a position.
Most robots are scalpers.
They make a few pips with each position they take.
They set a very tight target and too wide or no stop loss.
Can a trader survive with such a strategy?
Forex trading is an skill, knowledge and art.
It is something visual and analytical.
It cannot be done by a software.
Besides, markets conditions change all the time.
It is only an experienced trader who is able to distinguish when to enter the market and when to stay away from.
Don’t waste your time and money on things like automated forex trading software or robots.
Instead, spend some time on learning a strong trading strategy.
Become a professional trader who relays on his own knowledge and experience, not on some pieces of computer codes written by someone who is not a trader himself: Trading Strategies Don’t Work If You Don’t Choose the Right Living Strategy