Why Use a Forex Robot

Forex robots are gaining in popularity and spawning a whole new industry.  They are believed to provide numerous benefits to traders who are taking advantage of their money management, discipline and support capabilities. Forex robots are also known as Expert Advisors or EA. Why are Forex robots successful?

As an expert advisor, Forex robots provide advice and information about when to buy, sell and close an open trade.  The expert advisor interprets and identifies trading signals from analyzing the Forex market using algorithms either hard coded by the programmers or manually set by the user.

What do they do?

Forex robots provide indicators when a trader should open or close a trade.  Some traders would like to be notified first before the robot enters a trade and the trader would manually open or close the trade.  But the EA could be programmed so that it could automatically enter a transaction.  The trader can also be responsible for providing the structure where certain trade information and signals would be determined.

Forex robots can apply money management strategies to their program and incorporate it in the trades that they do.  Money management is all about determining size of trades and loss parameters.  Some traders prefer not to include money management but rather have an open strategy.  But this could be a costly mistake, so it is better to make sure that the Forex robot already has money management  or you could input algorithms in the system to integrate your own money management style.

Forex robots are also capable of placing, changing and removing stop losses.

To operate a Forex robot or an EA, you need a computer, a stable internet connection and at least some knowledge on how Forex trading works. You also have to sign up for an account with a Forex broker that uses the proper interface. This trading interface monitors the Forex market and enables you to perform trades manually.  After setting up an account, you would typically get the Forex robot from a manufacturer.  The EA is then downloaded to your computer and connected to the broker’s trading interface.

But there is a certain difficulty when using a Forex robot. Although it can do trading for you 24 hours a day and 5 days a week, it is impossible to keep your computer working for that long.  Many robot traders use virtual hosting where the software is hosted on a bigger server which can run 24/5.

You as the trader obtain a username and password to have access to your server.  When looking for services like this, it is important to have a demo account first where you can check the service before trading real money. These services are usually priced on a small monthly fee basis.

Keep in mind that simply using a Forex robot does not guarantee success in the Forex market. It is simply a tool. Success still relies on your trading skills, knowledge and mindset

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