Everybody wishes he knew the secret to Forex trading, but very few ever find it. Traders win and lose, and those who are the most educated about it and those who have the right tools are usually those who win. As far as tools are concerned, some people swear by Forex robots, and others say trading software is a waste of money.
What Forex Robots Do
Robots hunt down trades, get you into the market, and then at some point, get you out of it; hopefully, with a profit. All software that trades currency pairs is different in that each one uses different formulas for what it recognizes as a good trade. There can be a wide variance in these formulas.
Just for example, a robot trading software might recognize a pattern in a currency pair in which there has been a solid uptrend then two down days in a row. If it is programmed to see that reversal as a good trade, it will put you into it on the short side, or at least alert you, depending on how it is set up. It rides that trade until it sees the downtrend reverse. It may then get you out or put you back into the other side of the trade.
Again, that is just an example of how a Forex robot might work. In reality, each software is programmed with many complicated formulas. That is why you read so many reviews about which one works and which does not.
One Problem Trading Forex with a Robot
If you think that Forex trading with software is the Holy Grail for you, think again. Some of these robots work very well, but the trades they make often require deep pockets. In other words, trades have to take their course, which includes many ups and downs, before they come to fruition. If that course includes putting the position at a temporary and deep loss and you get out, you may lose money only to see the trade reverse and become a winner. A few trades like that may wipe out your account.
Forex trading robots are neither good nor bad. To be sure, some are poorly developed, but the theory is not bad, and some people profit with them. Before you even get that far into trading currencies, though, you should have a good handle on how to trade for yourself, and you should always apply the rules of proper money management.
The uprising of forex techniques will always make things a little extra competitive to all. Whereas, you as a wise trader, must always look at the fundamental fx trading strategies.
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