It has become common nowadays for many traders to resort to using modern technological methods in trading operations, which provides them with many significant advantages.
An increasing number of traders prefer to use trading systems or software that allow them to automate their trades — reducing the burden of emotional stress while trading or compensating for poor self-discipline. These are precisely the tasks of a forex robot, and the MetaTrader 4 platform is one of the best trading stations that provide a suitable environment for using these automated programs.
The MetaTrader 4 platform provides complete solutions to clients’ needs, including charts, news feeds and many more. You can also use the platform’s native programming language, MQL4, to write custom indicators or trading strategies, which are called expert advisors.
An expert advisor (EA) is one of the names given to forex robots, which are being developed to be suitable for use on the MetaTrader 4 platform. Given the ability of the trader to customize the settings of the expert advisor, he can benefit from this feature in the application of any trading strategy or risk management system as long as the designer knows how to code these settings within the program.
For example, a trader might design an expert advisor to open market positions of a specific size at the intersection of the moving averages.
Advantages of Forex Robots
The main advantage of using a forex robot is its ability to rid a trader of the negative influence of human emotions, which can be a huge drawback for many traders if they are not adequately managed. Feelings of fear, greed and emotional stress build up easily and quickly when trading manually, which can lead a trader to lose money and fall prey to frustration.
On the other hand, the robot allows the implementation of the required strategy very smoothly and with a high degree of accuracy. The robot can also do all the complex calculations of risk management elements in a flash faster than the trader himself. It does not depend on that, but you can design the robots so that they trade around the clock and in different market conditions, and thus you will not have to sit long in front of the computer screen all night and day.
In short, a forex robot can handle a great deal of the burdens and hard work of a trader, noting that the trader is already making strenuous efforts in the stage before running the trading program, especially in the stage of development and testing of ideas.
Negative Side of Forex Robots
Forex robots can be a handy tool in a trader’s arsenal, but they are not without their drawbacks. Forex robots tend to rely heavily on backtesting and past trends to make predictions about the future, meaning that they may not accurately identify market conditions as quickly as a human being who is better equipped to spot patterns and opportunities.
Furthermore, since forex robots are programmed to follow specific criteria, traders can’t always customize them according to their own individual investing style. As a result, many traders find that using a forex robot limits their ability to make unique decisions based on their own assessment of the markets. Any trader interested in automated trading needs to consider both the benefits and disadvantages of using forex robots before taking the plunge.
Of course, there is no easy way to make profits in the forex market, which is why it cannot be denied that there are some limitations and drawbacks associated with using forex robots. One such dark side is fierce competition in the forex market, and getting a robot that is effective enough to achieve reasonable success takes time and effort.
The fact is that testing a robot’s proficiency should not be limited to a few weeks, it should be applied to trading data for months or even years with rigorous statistical tests to prove how well it works. This step is essential because the trader’s need for more confidence in the robot will lead him sooner or later to ignore its signals in challenging times, which is the first step on the road to failure.