Forex robots, also called Expert Advisors (EAs) or trading algorithms, are pieces of software that automatically buy and sell currencies or other assets based on programmed instructions. Building a forex robot is no easy task as it requires programming knowledge, but there are ways to overcome this challenge.
A forex robot has several advantages over manual trading, but there are important points to consider before deciding to use one. This guide should help you find the best forex robots in 2021 and it explains what you should consider when comparing robots.
Our List of the Best Forex Robots
Here is our list of the best forex robots in 2021:
What Are Forex Robots?
Forex robots are programs that automatically execute orders to buy or sell assets. They can be applied to any currency pair and timeframe to operate 24/5 for as long as the forex market remains open.
Some limitations exist, like the need to keep the trading platform always open and connected to the internet. However, a Virtual Private Server (VPS) easily solves this problem, and some brokers offer free VPS connections.
How Do Forex Robots Work?
The first thing to consider is how to get a forex robot; either by purchasing one or by building one yourself for your trading strategy. If you don’t have the programming skills to build your own robot, you can outsource this task to someone else.
However you go about getting your trading robot, it’s important to back-test it against historic charts to see if it should achieve the results you want before putting it to work.
Putting the robot to work means uploading it to the trading platform (which is not that hard when you know how) and enabling it for live trading (otherwise it won’t make any trades). Attaching the robot to a live chart will then allow it to start opening and closing positions according to the programmed instructions.
Key Features to Look in Forex Robots
Make sure you know the strategy that lies behind the forex robot. For example, a forex robot that has been built to trade a five-minute chart won’t achieve the desired results when attached to a one-hour chart. You should also ensure that the other parameters, such as broker commissions and spreads, are the same as those used when back-testing the robot’s efficacy.
Although profit is your primary objective — the bigger, the better — be mindful of the drawdown along the way. A robot advertised to achieve a 1000% profit could subject you to a 50% drawdown along the way. So, are you willing to lose half your money on route to (maybe) increasing it by a factor of ten?
Pros & Cons of Using Forex Robots
How to Choose the Best Forex Robots for Me?
Our list of the best forex robots should help you make your choice but it’s only a starting point.
One thing you should check for yourself is that the robot’s time frame is suitable for the size of your account. For example: if the forex robot must be used on the daily chart, and it needs a stop distance of a couple of hundred pips (points of price movement) for every trade, is the account sufficiently funded to support this level of risk?
How to Safely Use a Forex Robot to Make Money Online Trading?“ While a broker is responsible for efficiently executing the trading instructions you or your robot provide, you are responsible for the results (profits or losses) of your trading strategy. When trading without a robot, you should put sound money management in place, which typically means allocating no more than 1% of your available funds to each separate trade. You should also have sound risk management in place, which means attaching a protective loss-limiting stop order to each trade. When trading with a robot, you should be able to adjust these parameters, but bear in mind that this may significantly affect your results if the robot was back-tested with different parameters. ”- Mircea Vasiu
Forex robots make the life of a trader easier, but using them can sometimes be a challenging task. This guide, and our list of the best forex robots, should help you navigate these challenges.
Frequently Asked Questions
No. A regulated broker must follow specific rules to be allowed to offer its services in the region regulated by the financial authority. These rules come with supplemental costs, both before the licence is given and after. Rigorous controls are applied constantly, and the broker must meet all the conditions to keep their license in force. Some brokers choose to skip regulation, to the detriment of their customers and the brokerage industry at the same time.
It depends on what the trader is looking for. For stock trading, MetaTrader might not be the best choice because it only supports contracts-for-difference (CFDs). However, many forex traders view MT4 and MT5 as the most complete solutions available on the market
Yes. Stiff competition forced forex brokers to offer other markets to their customers in order to differentiate their services. As such, from the same FX trading account, the trader may add positions on gold, silver, oil, other commodities, individual shares, and indices.
Yes. The broker only requires a legal ID for verification purposes and the rest of the process is a basic one. Depending on the broker, a trading account can be opened within a couple of hours.
No. Past performance is not a perfect predictor of future results. Also, the more you tweak a robot to achieve impressive results based on particular past charts, the less adaptable it is to different market conditions in the future.
Not quite. A stop order (the generic term) is usually put in place to limit the potential loss on a trade, to exit a trade at a small loss before it becomes a big loss. However, you can also use a stop order to secure some of the profit on a successful trade, and a trailing stop order can serve both purposes: to stop a loss and secure a profit.