Using robots and technical indicators to trade Forex
The use of application programs (scripts) - trading robots (Expert Advisors) and technical indicators (Custom Indicators) - to automate trade in the international currency market Forex is not only a modern solution. iI is also a useful addition to the functionality of the trading terminal, and sometimes even a necessity when playing with currencies, both professionals and beginners. However, you should be careful about the quality of these programs, namely, the accuracy and speed of their work.
For this reason, individual robots and indicators for trading on Forex can only harm their user, because the developer (and trader, too) it is essential to understand the goals of their use, test for compliance with these goals and "fit" to achieve the optimal result.
How does a Forex trading robot or technical indicator work?
The main task of all forex robots and technical indicators is to implement similar, routine, repeatable operations at the highest possible speed of response with the utmost accuracy of their execution. It relieves the trader from tiresome making monotonous decisions, saving his time for developing new, more effective trading strategies and analysis of market fundamentals.
It is also important to relieve a trader from a severe stress load. The dull attention of even the most experienced player, as a rule, leads to making the most elementary mistakes, which he then tries to correct by taking an unreasonably high risk - to return the lost funds, which can overnight nullify his account. The emotional component, among other human factors, has ruined more than one successful currency trader.
Application programs for Forex can be called:
advisors, experts, trading robots or mechanical trading systems;
All of them are designed to maximize automation of the process of trading in Forex. Their main functions:
24-hour financial market analysis and detailed tracking of trading signals;
execution of the programmed strategy;
autonomous twenty-four-hour trading without trader, computer and internet participation and control of all transactions - sending any requests for transactions to a forex broker without human involvement;
lightning-fast processing of considerable arrays of data;
no illusions regarding the assessment of any particular risk.
Forex robots can be written with different drawdown assumptions, for example, from 5 to 60% depending on the strategy being implemented. There are such robots that can capture price fluctuations in two-second intervals and have time to make buy/sell deals, which a person obviously cannot do physically and intellectually.
Which Forex robot is better to choose?
Undoubtedly, you can find specific ratings of robot programs for Forex on the Internet. Still, it is not known among what total sample they were compiled and whether it was representative. On what period was the robot tested? How many traders tasted it? All these questions, in most cases, do not have a clear answer.
Also unknown is the engagement of rating compilers. Therefore, you can rely on the ratings, but only in terms of familiarization, but not for making a decision.
It is desirable to test robots independently and/or with the participation of experienced brokers.
The best robots for trading on Forex are those which:
written by yourself or your forex broker;
tested in person or by your Internet broker.
Again, the more qualitative work is done by programmers and experienced traders when creating and writing a robot program for Forex, the more expensive it will cost. There are also free robots, but they can be used only for demo-testing. Otherwise, the price range for various trading robots is vast - from $30 to $30,000. Another question is, can an expensive robot be at least a quarter more efficient than a cheaper one?
Any application program (forex robot, technical indicator or other scripts) is written for specific trading platforms and terminals. The most authoritative and accessible of them is MetaTrader versions 4 and 5. MetaTrader has the most significant number of all kinds of scripts written for its own MQL4 IDE and MQL5 IDE development environments in MetaQuotes Language versions 4 and 5, respectively.
Selecting, installing and configuring trading robots is a feasible task; you just need to have a satisfying theoretical and practical base. It is quicker and more reliable to get it at specialized courses. Education in trading will be useful also because you can not entirely rely on any trading robot. In essence, you will need to think through strategies that you will program for automatic execution.
Warning: proposed contracts or financial instruments are highly risky and could result in the loss of the full amount of cash deposited. You should be aware of the risks involved before entering into any transactions.