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What are Automated Trading Robot? Do they work?

Your capital may be at risk. This material is not investment advice.

If you have just started trading, you may be wondering if an Automated Trading Robot can help you in your operations.
Everyone wants to know if it is possible to make money with an automatic, free or paid Forex robot!

As you gain experience you will see that Trading operations are very versatile due to the different trading styles, strategies and systems that can be used.
In the Forex market, there are Traders of all levels of competition and each one will have different ways of working
That is why throughout this article we are going to address various aspects related to trading robots.

We will talk about algorithmic trading, including binary options scams and high frequency trading, which is only possible thanks to trading robots.

But first of all, what is a trading robot?

What is an Automatic Trading Robot
One of the characteristics of Forex is the division between Traders who want to trade manually and those who want to use Automatic Trading.
This Trading requires detailed research to find the right software that performs the correct operations.

Sitting back and letting a device do the work for you can be a temptation. And this is where the automated Forex robot comes in.

A Forex robot is a computer program based on a set of currency trading signals that helps to define whether to buy or sell a certain currency pair at a certain time.
It is an automatic trading software that places orders on the stock market, according to the programming code that has been given to it.

Automatic Trading robots are available 24/7, depending on the strategy written in their source code. They can be purchased over the Internet. There is no holy grail of trading systems, regardless of the type to which they belong

Do Automatic Trading Robots Work?

The question that many ask is whether the automatic Forex trading robots work, or if they will be another trading fraud. We have prepared this article to address this question.

Forex Traders want to use automated trading robots just because they expect to get easy money from the Forex market without having to spend a lot of personal time, or to trade manually. Those who use robots have to find a good currency pair and the perfect time frame to maximize their profits.

Some automated Forex robots are capable of scanning numerous charts in a way that humans physically cannot. Furthermore, robots are developed with particular parameters necessary to make trading decisions. With the implemented trading signals, they determine when it is appropriate to trade or, conversely, to wait.
The best Forex robots suggest solutions to find profitable deals even in unstable markets when the current direction of trends is unclear.

Automated Forex robots will follow the best trend to increase profits and perhaps eliminate the chances of possible losses.

Trading against the trend will lead to one loss after another. However, trading in favor of the trend will increase your profits, regardless of your strategy or the automatic trading robot you use.

Forex Robot - Operation

It is very simple for an automated trading robot to execute the lines of code that the programmer has inserted into the EA.

Like any computer program, a HF trading robot or a Forex robot is based on lines of code written in the form of a specific programming language.

For example, if a trader hires a programmer to create a custom trading robot based on:

  • A position paper with two short-term moving average crosses
  • A trend filter with a long-term simple moving average

The encoder will write the following conditions into the MT4 robot code:

  1. Look for a buy signal if the price is above the long-term simple moving average.
  2. Open a buy position if the first condition is met and the two short-term moving averages cross up.
  3. Look for a sell signal if the price is below the long-term simple moving average.
  4. Open a short position if the third condition is met and the two short-term moving averages cross down.

Many people want to use an automated trading robot because they expect to make money quickly and easily in the forex market.

However, it should be understood that Forex robots are developed with particular parameters necessary to make quick trading decisions. Using accurate trading signals, they determine when it is appropriate to trade or not trade.

This means that if conditions change, the robot tasked with interpreting the market for a given brand will likely have a harder time being profitable and this is not insignificant.
As you may have understood by now, it is important to note that all forex robots operate in a certain market configuration and have difficulty adapting to changes in trend.

Thus we can find robots that work very well in a trend market, but lose a lot in a range and vice versa.

The most modern trading robots are based on artificial intelligence mechanisms and try to adapt to market conditions. This type of robot is still very expensive and very difficult to find.
The best robots to trade Forex will have to make stops to deal with unstable markets or when the trend is not very clear. Most of the Forex robots will follow the trend to increase profits. But you must not forget that trading against a trend can lead to many losses.
In MetaTrader 4 and MetaTrader 5 the automatic trading robots are called Expert Advisor or Expert Advisors (EAs).

Expert Advisors need the MetaTrader platform to be activated in order to work. Very often, investors buy a VPS to install trading software on it.

The VPS is a virtual server that is always on and in this way the automatic trading program can work all the time. VPS are quite cheap, about 15 euros per month.

The advantage is that the MT4 and MT5 platform stays on all the time and therefore the automatic software can track the markets non-stop.

Now we know exactly what an automatic trading robot is and how it works, but … how can you choose the best robot to trade?

How to choose the best automatic trading robot

The most widely used robots are MetaTrader Expert Advisors. MetaTrader robots give trading signals and execute market orders automatically.

There are many companies that create and sell forex robots. If you want to buy a robot, be careful. There are many miracle robots on the market with guaranteed performance and the sites that sell them disappear after a while, once they have sold a large stock of that software.

A prerequisite for choosing an EA (Expert Advisor), which is the name of the trading robots present on the MT4 and MT5 platforms, is to have a solid understanding of the operations and behavior of the financial market in which you want to speculate or invest.

Here are the 5 criteria to meet when choosing an automated trading robot:

  1. Possess advanced knowledge of trading
  2. Be aware of the danger of over-optimization (avoid having the trading robot parameters over-optimized for a very specific period of time).
  3. Know the exact details of the operation and strategy of the automatic robot
  4. Be able to backtest
  5. Be able to test the forex robot in real conditions on a demo account

In a second step, it can be useful to put several EAs next to each other to make better robot comparisons. This requires knowing how to assess the value of an automatic Forex robot.

How to evaluate trading with Forex robots

As you already know, there are many Forex robots on the Internet, paid and free. Finding the right robot for you is no easy task!

That is why it is necessary to know the possible and relevant points of comparison in order to evaluate the value of one Forex trading robot compared to another.

To answer this problem in a simple and precise way, we must separate two cases:

  • Buy automatic trading robot

In this case, unfortunately, you can only refer to the testimonials of other EA users and assume that the comments on the network are real comments from other traders.

This is the reason why buying a Forex Expert Advisor is more complex, except when it is possible to test the robot before buying. In this case, the way to evaluate the robot will be the same as when testing the free EAs downloaded from the Internet.

Download the automatic trading robot for free

Downloading a free Forex robot is by definition an easier and more attractive option, but it is important to know that many EAs on the Internet are over-optimized to give good results for a well-defined period of time, to justify a high price.

Expert Advisors need the MetaTrader platform to be activated in order to work. Very often, investors buy a VPS to install trading software on it.

The VPS is a virtual server that is always on and in this way the automatic trading program can work all the time. VPS are quite cheap, about 15 euros per month.

The advantage is that the MT4 and MT5 platform stays on all the time and therefore the automatic software can track the markets non-stop.

Now we know exactly what an automatic trading robot is and how it works, but … how can you choose the best robot to trade?

How to choose the best automatic trading robot

The most widely used robots are MetaTrader Expert Advisors. MetaTrader robots give trading signals and execute market orders automatically.

There are many companies that create and sell forex robots. If you want to buy a robot, be careful. There are many miracle robots on the market with guaranteed performance and the sites that sell them disappear after a while, once they have sold a large stock of that software.

A prerequisite for choosing an EA (Expert Advisor), which is the name of the trading robots present on the MT4 and MT5 platforms, is to have a solid understanding of the operations and behavior of the financial market in which you want to speculate or invest.

Here are the 5 criteria to meet when choosing an automated trading robot:
Possess advanced knowledge of trading

Be aware of the danger of over-optimization (avoid having the trading robot parameters over-optimized for a very specific period of time).

Know the exact details of the operation and strategy of the automatic robot
Be able to backtest

Be able to test the forex robot in real conditions on a demo account
In a second step, it can be useful to put several EAs next to each other to make better robot comparisons. This requires knowing how to assess the value of an automatic Forex robot.

How to evaluate trading with Forex robots

As you already know, there are many Forex robots on the Internet, paid and free. Finding the right robot for you is no easy task!

That is why it is necessary to know the possible and relevant points of comparison in order to evaluate the value of one Forex trading robot compared to another.

To answer this problem in a simple and precise way, we must separate two cases:

Buy automatic trading robot
In this case, unfortunately, you can only refer to the testimonials of other EA users and assume that the comments on the network are real comments from other traders.

This is the reason why buying a Forex Expert Advisor is more complex, except when it is possible to test the robot before buying. In this case, the way to evaluate the robot will be the same as when testing the free EAs downloaded from the Internet.

Download the automatic trading robot for free
Downloading a free Forex robot is by definition an easier and more attractive option, but it is important to know that many EAs on the Internet are over-optimized to give good results for a well-defined period of time, to justify a high price.

Only by verifying that the operation of the EA is identical in the historical data and in the real-time data, you can ensure that it is working correctly.

Downloading a free Forex robot is by definition an easier and more attractive option, but it is important to know that many EAs on the Internet are over-optimized to give good results for a well-defined period of time, to justify a high price.

Expert Advisors need the MetaTrader platform to be activated in order to work. Very often, investors buy a VPS to install trading software on it.

The VPS is a virtual server that is always on and in this way the automatic trading program can work all the time. VPS are quite cheap, about 15 euros per month.

The advantage is that the MT4 and MT5 platform stays on all the time and therefore the automatic software can track the markets non-stop.

Now we know exactly what an automatic trading robot is and how it works, but … how can you choose the best robot to trade?

How to choose the best automatic trading robot

The most widely used robots are MetaTrader Expert Advisors. MetaTrader robots give trading signals and execute market orders automatically.

There are many companies that create and sell forex robots. If you want to buy a robot, be careful. There are many miracle robots on the market with guaranteed performance and the sites that sell them disappear after a while, once they have sold a large stock of that software.

A prerequisite for choosing an EA (Expert Advisor), which is the name of the trading robots present on the MT4 and MT5 platforms, is to have a solid understanding of the operations and behavior of the financial market in which you want to speculate or invest.

Here are the 5 criteria to meet when choosing an automated trading robot:

  1. Possess advanced knowledge of trading
  2. Be aware of the danger of over-optimization (avoid that the trading robot parameters are too optimized for a very specific period of time).
  3. Know the exact details of the operation and strategy of the automatic robot
  4. Be able to backtest
  5. Be able to test the forex robot in real conditions on a demo account

En un segundo paso, puede ser útil poner varios EAs uno al lado del otro para hacer mejores comparaciones de robots. Para ello es necesario saber cómo evaluar el valor de un robot automático de Forex.

How to evaluate trading with Forex robots

As you already know, there are many Forex robots on the Internet, paid and free. Finding the right robot for you is no easy task!

That is why it is necessary to know the possible and relevant points of comparison in order to evaluate the value of one Forex trading robot compared to another.

To answer this problem in a simple and precise way, we must separate two cases:

Buy automatic trading robot
In this case, unfortunately, you can only refer to the testimonials of other EA users and assume that the comments on the network are real comments from other traders.
This is the reason why buying a Forex Expert Advisor is more complex, except when it is possible to test the robot before buying. In this case, the way to evaluate the robot will be the same as when testing the free EAs downloaded from the Internet.

Download the automatic trading robot for free
Downloading a free Forex robot is by definition an easier and more attractive option, but it is important to know that many EAs on the Internet are over-optimized to give good results for a well-defined period of time, to justify a high price.
Only by verifying that the operation of the EA is identical in the historical data and in the real-time data, you can ensure that it is working correctly.

How to program a Forex robot

  • The programming languages ​​are diverse:
  • MQL4
  • MQL5
  • C ++

And many others
To create a trading robot, it is better to know a lot about programming.
If you don’t know how to program, you can use companies or programmers specialized in programming high-performance robots. You can also find:

  • Robot trading forums where you can ask your questions
  • A comparison between trading robots
  • A free Forex robot software to try

Not all programmers are necessarily familiar with finance, which is why it is interesting to look for a high-performance automatic trading robot made by people who are familiar with finance and automatic online trading.

You can also buy a Forex robot or download it from the Metaquotes website.

You can find any type of trading robot with Ichimoku, moving averages, RSI or any other technical indicator or combination of technical indicators.

The best robots to trade are hard to find and if you stop and think about it, a reliable automatic trading robot may not be available for sale.

It is even legitimate to ask the following question:

“If the robot is so good, why sell it?”

If the robot is good, then it can potentially make money. This does not mean that a free trading robot is necessarily a scam, but we must consider this approach anyway.

Which broker allows to use an Automatic Trading Robot

It should be noted that not all CFD brokers allow the use of software to trade automated robots. This is not the case  you can use the free or paid robot trading software of your choice.
Precisely, if you have an automatic trading robot, do not hesitate to test it on a demo account with virtual funds before you start trading with it on a real trading account.

  • You can test it on the following accounts:
  • A standard account for CFDs, Trade.MT4 or Trade.MT5
  • An Invest.MT5 account for stocks

In addition to allowing and facilitating the use of trading robots, offers ideal conditions for EAs, for example, no entry and exit fees for each position, only the spread counts!
In this way, you can carry out your trading with the help of a Forex robot and ensure its correct operation no matter what financial market you are interested in.

Types of automatic trading robots

Trading robots can be classified into several categories:

Depending on the market:

  • Forex trading robot
  • Binary Option Trading Robot
  • CFD trading robot

Depending on the trading platform:

  • Expert Advisors MetaTrader
  • Other platforms

Depending on the investment horizon:

  • Forex scalping robots
  • Long-term trading robots
  • Binary options robots

Depending on the analysis of the automatic trading software:

  • Technical analysis
  • Economic news

Automatic Trading Robot - Advantages

The advantage of automatic trading on MetaTrader is that MT4 and MT5 have a huge base of freely available Expert Advisors and vendors who sell their robots.
MT4 or MT5 automatic trading robots are expert advisors developed in the mql4 or mql5 programming language with the following advantages:

  • Speed ​​of execution
  • Impartiality, without hesitation in decision making
  • Flexible trading hours, the Forex robot will not get tired after many hours of activity in the market, unlike the trader.

The advantage of automatic trading is that there is no human being and all his psychology behind the stock market orders. A Forex robot has no regrets once it closes an order or when it takes losses. And the psychology of the trader can play more than one trick on him.

Winning robots are programs that learn from their mistakes and look for specific signals in the market. Large banks and investment funds have armies of programmers who work all day on these types of automated tools.

Auto Trading Robot - Disadvantages

Trading robots also have some disadvantages.
In finance, past performance does not guarantee future performance.

  • If you test a trading robot over a period of time and it performs well in a trending market, you will be very satisfied with its results.
  • If the market becomes a little more indecisive and turns within a range, your EA will start to take losses.

At this time, automatic trading robots do not have the artificial intelligence to adapt to market conditions, especially the software that you will buy for 200 euros on the Internet.
Robots cannot replace the reasoning of a human being. It is true that calculations are easier with automatic trading software, but no program can replace human intuition.
If you want to try automatic trading, do it with a MetaTrader demo account.

The automated trading robots scam

As you can see, many trading robots will not be good in the long run, especially binary options robots, which are often the end result of scams.

If an online broker offers to install a robot to operate for you, be careful, because it is most likely a scam that aims to liquidate your account.

These online brokers are not regulated and are not allowed to give financial investment advice, so if you are approached to make super profitable investments, do not fall into the trap and always trade with a regulated broker!

Opinions about Automatic Trading Robots

Although Forex trading robots promise to perform profitably, not all of them achieve the results that traders expect.

There are many who consider them a scam. Because of this, you are not likely to find an article in Forbes, the Wall Street Journal, or any other reputable news source promoting them.

Also, the federal government considers most of them to be just scams. Similarly, you are not likely to find any items.

Many false statements have been discovered from people who claimed to have made a lot of money with Forex robots. But the truth is that many investors and traders have lost a lot of money using free Forex Robots.

For this reason we advise you that if you want to know the effectiveness of an automatic trading robot, you review authorized and certified comments and testimonials.

Also, do not forget that the best thing you can do is try a trading robot for yourself and not believe all the advertisements available on the Internet.

It is true that in finance we cannot guarantee future performance based on past performance, but we can at least test the CFD robot and the Forex robot before putting it into action on our live account.

Serious forex robot software sellers can offer you a demo version of their robot. Look carefully at the robot forums, but do not forget that there are all kinds of people who have financial interests to make you believe that this or that robot generates a lot of money.

A vast majority of Internet users think that if it was so easy to make money using forex robots, no one would go to work. This is absolutely true in the end.

However, it is possible that Forex trading robots can make money for a limited period of time, but they can also start to lose and the money earned by this “best Forex trading robot” can disappear just as easily and quickly.

Furthermore, the vast majority of automated robots make only a few points per position with a considerably tight take profit.

Therefore, the chances of survival with such a strategy are quite limited for a trader, as he will be exposed to a high success rate but an unfavorable risk-reward ratio.

MetaTrader5 automated trading robot

Automatic currency trading is possible on MT5 through the MQL5 computer language present in the new generation of trading platforms.

MT5 is the latest version of MetaTrader, that is why at this time you will find less content on the net for MT5 trading robots than for MT4.

However, more and more content and more types of Expert Advisors will appear and that will allow you to find an automatic trading robot with which you can perform semi-automatic operations.

What is certain is that the “Strategy Tester” part of MT5 is an improved version of MT4. The latest version is:

  • Faster
  • More complete
  • More professional

Automatic Trading Robots - Conclusion

We hope we have helped you formulate your own answer to the question:

Is it better to trade with an automatic trading robot?

Our conclusion is that instead of spending your money on a robot, you better use your time and money to train in trading. Over time you can become a professional trader who relies on his knowledge and experience, rather than the algorithms and computer codes of someone who is not a Forex trader.

But in the end, only you can answer the question of whether the automatic trading robot really works.
Profiting from trading is based on knowledge, skill and rigor, but also patience.

When studying automated trading robots, it is evident that for the most part they cannot function properly autonomously. Market conditions tend to change all the time and only an experienced trader can tell when to enter the market or stay away.

If you want to test trading robots, you can do so on the MetaTrader 4 or MetaTrader 5 trading platform to form your own opinion.
Finally, we leave you a tip you should think about:

Trading with automatic robots works by definition for a certain period of time, nothing can work 100% of the time in a stock market that goes from trending in certain sessions to then returning to a range market in subsequent sessions.

NOTE: This article is not an investment advice. Any references to historical price movements or levels is informational and based on external analysis and we do not warranty that any such movements or levels are likely to reoccur in the future. In accordance with European Securities and Markets Authority’s (ESMA) requirements, binary and digital options trading is only available to clients categorized as professional clients.
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