Since Forex robots were introduced into the trading scene, there has been much discussion about their benefits with pundits for both sides enthusiastically endorsing their views.
A Forex robot is a software system which can be programed to trade automatically at specific times. The trader decides when he or she wants a trade to be executed, at what price and in what setup and the robot follows these instructions.
Advantages
The basic advantages of a Forex robot are obvious: In today’s fast-paced world, nobody has the time to do everything they want to do. Anyone working a full time job but still wants to make a few extra bucks on the side by investing his money just doesn’t have to time to devote to watching the markets and making a prudent trading decision. Here’s where a Forex robot can be beneficial. You set the robot to place the trade at a time when you are sitting at your desk doing your day job or off on the construction site pouring cement foundations. The robot takes care of everything. All you have to do is activate your mobile device or your PC at home and voila, your trade is executed.
Disadvantages
What the robot cannot do is trade the news or make decisions based on news occurring around the world. The very nature of a robot is its ability to follow pre-arranged orders and execute trades as ordered and unless a human comes along and changes the settings, the robot will do exactly as programed. So if you woke up in the morning to the screams of your baby, knocked over the carton of milk and dashed out the door to make the 8:05 train, you just might have forgotten to check the morning news and decide how it will impact on your pre-set trading decisions.
This can easily happen. We are only human after all and can’t always remember to take care of things exactly on time. This is when a robot can fail you. If you don’t reach your robot in time to make the change, you can find yourself at the end of a trend and see all your previous profits go down the drain.
And what about margin calls? Market scams? Bad brokers? Being inanimate, robots cannot react to any sudden market events or trading adjustments. Only human traders can do that-and not always adequately at that.
Another point to keep in mind is that most robots do not come cheap. So when figuring out your profits–which you hope will materialize—you must first deduct the cost of the robot program before you can see what your real revenues are. It is also very worthwhile to read reviews on the different robots and to compare them to each other. They are not all the same and some have features that others don’t offer. If you are going to shell out a good amount of cash on a robot, you might as well choose the one that best meets your needs and personality.
To sum up, robots are great when you have to know how and when to use them. If you mess up, they can create loses that you can’t blame on anyone but yourself. When properly managed, robots can be great systems for making that extra money you always need.
