Trik trading forex and successful robot forex trading
The popularity of forex automatic trading robots keeps increasing, in
spite of the dubious returns generated by using them. If you’re
interested in trading currencies, there’s more than a slight chance that
at some point in your trading career you’ve considered buying one of
the software advertised online as the greatest revolution in trading,
the best robot that awes the pros and experts with its successes.
There’s little merit to these ostentatious claims, but if you are
intrigued by them, here are some things you must know before using or
buying any of the forex automatic trading robots.
Forex Automatic Trading Robots
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| Forex Automatic Trading Robots |
Forex robots are automated systems that enter trade orders in the
place of a human trader. They are programmed to generate returns by the
application of mathematical rules which are decided by their creators.
In other words, the intelligence and skill of a forex robot is entirely
dependant on its creator.
The forex robots run the pre-programmed routine under all circumstances; they don’t change, revise, or adapt it
to changing conditions in the market, but will attempt to cut losses
based on the instructions provided to by the programmer.
The commands executed by the robot are based on the tools of
technical analysis, but sophisticated programmers will also use back
testing to optimize the results of their robots. This process can be
automated itself, and involves tweaking of the program to ameliorate its
performance with respect to maximum drawdown, the placing of stop-loss
orders, and other aspects of money management.
What the programmers of these robots won’t tell you.
There are important problems with the logic behind the creation of
the
forex automatic trading robots, and the actual results generated by
them. The first and obvious issue is the fact that the robots have never
been tested in actual market conditions. In almost all cases, they are
tested on historic data, and non-trade related problems, such as
connectivity issues, or problems that originate from the broker which
would not be reflected on market data, are ignored. For example, even
the best robot will be useless if during some inevitable technical
problem originating at your local ISP a brief blackout wipes out your
account. Similarly, if, for whatever reason, spreads of your own broker
widen to levels much greater than that prevailing in the vast majority
of the market, even the best automated system will be useless. Only good
money management methods, through the use of proper stop-loss orders,
and preparation and willingness to admit and recognize losses can ensure
survival against such periods.
The second issue is born of the fact that by using a
forex automatic trading robot, you’re basically handing over the control of your
finances to a machine that has no brain. It is programmed to run
according to a set of rules at all times, and has no ability to adapt
itself to changing circumstances, regardless of the severity and
importance of the changes in question. This is perhaps the most
important disadvantage of using a robot in the forex market where change
is the only constant.
trik trading forex and successfull robot forex trading
Finally, and in relation to the above, we should remember that the
robots are only as smart as their creators. Do you really believe that
the peddler selling you the robot is a market-busting genius at the
level of a Warren Buffet, or George Soros, who, after all, have had
their own fair share of disastrous trades over the years? If you don’t
think that the peddler is that smart, then why do you expect rules
written by him to beat the markets in a way that even the best traders
with proven records have never been able to do?
Conclusion: What to seek in a forex robot?
We do not advise that you purchase any forex robot, since trading by
using them, without understanding and knowing what you’re doing goes
against all the basic principles of a successful trading career. The
only kind of
forex robot useful for you would be one which you could use
to automate your own trading strategy, or one that you understand and
are confident about, having examined the inner mechanism, and design of
it. When you buy a
forex automatic trading robot, you know close to
nothing about why and how it performs, since even their creators don’t
know why the particular combination on the basis of which the robot is
operating is supposed to be creating good returns in the markets.
On the other hand, if you create your technical scheme and want to
automate it, there’s nothing wrong with purchasing a forex API pack from
a forex broker or API developer and using it for that purpose. But many
of us lack the confidence and the experience necessary for creating and
customizing these tools ourselves, which is why the robots are so
popular on the market these days, advertised by extravagant claims, and
hyperbole.
In short, the
forex automatic trading robot is an alluring, great
idea that promises a lot, but delivers little due to the random nature
of price action in the financial markets. If in spite of all the
information in this article you still have confidence that some of the
robots out there deliver the incredible returns promised by their
creators, consider the obvious. If the owners of these systems have
achieved the Holy Grail of trading, why would they peddle it to you
online for meager sums? They would not even need to advertise them, as
financial institutions all over the world would compete with each other
to acquire these products from them. Instead, large firms and broker
ignore the robots and creators. Why won’t you do the same?
