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Forex Robots

Forex Robots vs. Forex Humans

Forex Robots vs. Human Forex Traders: The Steel Cage Match

Just as there are “Google Bots” that comb web pages to generate search results, there are forex robots which explore the currency markets for buy and sell opportunities.

Using Google as an analogy may tempt newer forex traders to view forex robots as the cure-all solution to foreign exchange trading. But does this jibe with reality? Can little forex robots or a forex megadroid actually, like dogs, go fetch your coffee and newspaper for you?

Many Forex Robots Are Quite Low-Tech

If I put a frying pan on your head, and concoct you a pair of tin foil ears, and call you a robot—are you a robot?

No, plus you look like a moron.

Dealing with forex robots is a little like that. You’ve got your simplistic forex trading software pulling data from questionable sources, and meanwhile encouraging you to take lots of risk, and then you’ve got your legitimate forex robot, which does generate foreign exchange buy and sell signals with accuracy that humans have a hard time matching.

How do you tell the difference between a fake robot and a “real” robot?

You pit the forex robot against either your own trading performance, if you’re pretty good at this, or the trading performance of someone you respect. For example, you could go on and sign up to follow a top-performing forex trader.

Who wins? Who chooses better trades, the robot or the human?

Forex robots that fail this test are not worth employing, let alone paying for. All you need, most of the time, is 4-5 trades from each source to make a decent comparison.

Forex Robots Don’t Care If They Get Blown Up

At the risk of making too many analogies, it can be further enlightening to understand that any forex robot you use, whether free or paid for, will not have the same kind of emotional attachment you, as a human being, naturally have to your financial welfare.

This can be a good thing, as when a forex robot pulls your account into a trade that makes sense, ruthlessly extracts 15 pips of profit, and then jumps you right back out. Whereas the human trader, perhaps, is sitting there rooting for 20 pips, on edge and bleary-eyed.

But also consider that numerous forex robots take more risk with your money than you would take yourself. For example, many forex robots trade with very wide stop-losses.
The unfeeling nature of forex autotrading robots does result in some great winning trades. The gains can be particularly strong, for example, if a currency trends hard—the robot will run that winner, while a human would be tempted to take profits early.

However, forex robots, especially the programs out there that are second-rate, don’t care if they—or your account—get blown up.

If you do care about that, make sure to view the settings on your forex robot and, when appropriate, change the settings to a more conservative level. Another strategy is to adjust your position size lower to accommodate forex robots that use wide stop losses.

Important Forex Information

The most important step in currency trading is finding the right broker; our forex experts can help. See our
reviews of forex brokers for more information.  arrow

Forex Megadroid is a program you download that does your trading for you. It trades only the EUR/USD currency pair. Read the forex megadroid review.  arrow

Forex Automoney and Forex Ambush are forex robot programs that have gained traction in the FX community. See the comparison: forex automoney vs. forex ambush  arrow

Forex robots should never be used as an excuse for you to abdicate responsibility over your own trading strategy. Learn the 3 rules for working with forex robots.  arrow