The Forex market is one of the most lucrative investment opportunities fx broker available today for the average individual. With just a small initial investment–and the proper training–one can control massive amounts of capital and make tremendous profits in a relatively short period of time.
However, to become a truly successful Forex trader, a massive time commitment is required. First, there is the time involved learning how to trade in the Forex market. In fact, most experts recommend that you spend at least a year trading a demo Forex account, so you don’t risk any money. That’s fine if you don’t need quick cash, but what if you want to trade Forex for a living? What if you need to turn a profit quickly?
The fact is, you must have at least some basic Forex knowledge to be successful. But, essentially, successful Forex trading is simply a matter of pattern recognition. When certain patterns are noticed on the Forex charts, predictable outcomes usually occur. Once you can read the charts, it’s easy money, right?
Wrong. Simply reading and reacting to a Forex chart is only half the battle. Once you recognize a favorable pattern and make your trade, you then must complete the second half of the task: managing the trade. I’m convinced that more people lose money in this phase of the Forex trade than at any other time. A trader recognizes a chart pattern and makes a good trade, but then doesn’t stick to the strategy. They either hold too long, or get out too early, causing them to miss out on profits, or worse, take a loss on the trade.
So how can this be avoided? The answer is simple: automated trading systems, also known as a Forex bot, or robot. These Forex bots can be programmed to recognize patterns, and trade accordingly. And, unlike a human trader, there is no emotion, fear, or greed involved. You set up the robot with your Forex strategy, and walk away.
Many traders are skeptical that a Forex robot can trade any better than they can. After all, a robot can’t “see” a symmetric triangle, or a head-and-shoulders pattern. So how can the robot be a good trader? The answer is very simple. Remember, no matter how complex a chart you’re used to looking at, behind that chart is just a series of numbers, nothing more, and nothing less. And ANY computer can crunch numbers and recognize patterns… therefore, any well-written piece of software can execute Forex trading strategies.
Now, this doesn’t mean that a trader can just “set it and forget it.” A Forex robot is only as good as the strategy the trader gives it. The best Forex robots allow traders to choose from a number of common strategies, tailor-made to fit the trader’s risk tolerance. This is why the trader must have at least a basic understanding of simple Forex strategies before investing in a robot. If you give the robot a bad strategy, it will execute a bad strategy, and cost you money.
There are many Forex robots offered on the internet today, some at exorbitant prices. Many claim to be miracle machines, generating ridiculous profits with no effort. These claims, while not entirely false, are almost always exaggerated. When buying a Forex robot, there are 3 key features to look for:
1. Multiple strategies: The Forex robot should let you choose from among several Forex strategies, based on market conditions and risk tolerance.
2. Total automation: Once the strategy is chosen, the robot should require a minimum of input from you. The idea is to get you away from the trading terminal, because you are likely to make emotional or greedy decisions which differ from your initial strategy. If you have to keep updating the bot every 5 to 10 minutes, this defeats the purpose.
3. LIVE historical results: Backtested results are good. But anyone trying to sell you a Forex trading robot should be able to show you recent results from actual live trades. Very few do this. Many advertisers will brag of 600% or more profit potential. What they don’t tell you is that those profits are from backtested results… in other words, they ran the robot using old data where they already knew the outcome. That doesn’t tell you anything about the robot’s future performance. You need RECENT results from a LIVE account.
To summarize, a Forex robot can be very helpful for your Forex trading, and it can help you generate plenty of profits in the Forex market. But, when you want to buy a Forex robot, be a smart shopper and make sure you’re buying one that works!