The concept of Forex robots has been in the currency industry for a while, but for most novices entering the market, the lingering question remains...
do Forex robots work? To begin, Forex trading robots are nothing more than a computer program that helps currency traders identify short term profit opportunities amongst currency pairs.
(A currency pair is the quotation of the relative value of a currency unit against the unit of another currency in the foreign exchange market.
The currency that is used as the reference is called the counter currency or quote currency and the currency that is quoted in relation is called the base currency or transaction currency.
).
The computer program charts a currency's valuation progress throughout the day, and based on the prerequisite parameters set by the trader, the Forex robot software will either buy or sell the currency in the hope of making a profit.
In general, a majority of the fx robot software that is commercially available has received mixed reviews.
If you are able to test the trade results of any particular software package, forward and backward, undoubtedly the software will have a high rate of executing profitable trades.
In fact, most of the proven Forex systems have a track record of winning 75% - 95% of their trades.
However, in order to achieve such a high success rate, it is imperative that a trader understand the risks involved with using a fx robot program.
The biggest issue to consider, when performing a risk-reward analysis in the comparison of Forex robot software, is money management.
More specifically, it is important to determine the type of stop loss strategy system the software utilizes in order to protect your capital, as the market reacts to various social, economic and political climates.
Another caveat to consider with fx robot software is the drawdown rate.
(A drawdown is a percentage of an account which could be lost in the case when there is a streak of losing trades.
It is a measure of the largest loss that a trader's account can expect to have at any given moment or period of time.
Eg.
, if a trader put $5000 to trade with and later he has lost $2500, that would be a 50% drawdown).
Ideally, a reliable Forex robot is one that has a percentage of winning trades above 70% with a maximum historical drawdown of less than 20%.
So, yes, Forex trading robots do work.
However, it is not as automatic as it is commonly portrayed; traders need to keep updating their trading parameters, and they need to do more due diligence when selecting Forex robot software in order to obtain and maintain winning trades.
do Forex robots work? To begin, Forex trading robots are nothing more than a computer program that helps currency traders identify short term profit opportunities amongst currency pairs.
(A currency pair is the quotation of the relative value of a currency unit against the unit of another currency in the foreign exchange market.
The currency that is used as the reference is called the counter currency or quote currency and the currency that is quoted in relation is called the base currency or transaction currency.
).
The computer program charts a currency's valuation progress throughout the day, and based on the prerequisite parameters set by the trader, the Forex robot software will either buy or sell the currency in the hope of making a profit.
In general, a majority of the fx robot software that is commercially available has received mixed reviews.
If you are able to test the trade results of any particular software package, forward and backward, undoubtedly the software will have a high rate of executing profitable trades.
In fact, most of the proven Forex systems have a track record of winning 75% - 95% of their trades.
However, in order to achieve such a high success rate, it is imperative that a trader understand the risks involved with using a fx robot program.
The biggest issue to consider, when performing a risk-reward analysis in the comparison of Forex robot software, is money management.
More specifically, it is important to determine the type of stop loss strategy system the software utilizes in order to protect your capital, as the market reacts to various social, economic and political climates.
Another caveat to consider with fx robot software is the drawdown rate.
(A drawdown is a percentage of an account which could be lost in the case when there is a streak of losing trades.
It is a measure of the largest loss that a trader's account can expect to have at any given moment or period of time.
Eg.
, if a trader put $5000 to trade with and later he has lost $2500, that would be a 50% drawdown).
Ideally, a reliable Forex robot is one that has a percentage of winning trades above 70% with a maximum historical drawdown of less than 20%.
So, yes, Forex trading robots do work.
However, it is not as automatic as it is commonly portrayed; traders need to keep updating their trading parameters, and they need to do more due diligence when selecting Forex robot software in order to obtain and maintain winning trades.