A Forex robot, or Expert Adviser as it is referred to on the popular Metatrader platform, is piece of software that is designed to automate Forex trading activities. They can either trade on full autopilot or automate certain aspects of trading.
Almost all successful human traders will follow some type of trading system which will have rules to govern all aspects of trading. They will have rules to help determine when is a good time to place a trade based on variety of technical indicators. They will also have money management rules covering such things as the number of lots to place, how much of their total trading capital they will commit to open positions, and what level to set profit limits or stop losses at.
Traders very often make mistakes when they fail to follow their rules by succumbing to their emotions. They may enter the wrong trades, get it too late and exit too early. Trading robots are nothing more than an automation of what a good human trader does. They are disciplined and stick to the rules that the trader coded into the software.
The MT4 trading platform is free to download and comes equipped with vary many technical indicators from simple moving averages to more complex fractal signal generators. An expert advisor can call on any of these indicators within is algorithm to help identify a trading signal. So trader can automate any technical signal he or she wishes using the power of an expert advisor.
The earlier Forex robots tended to focus on a major theme or strategy to make their trading decisions. Most of them would fall into one of the following camps:-
• Trending robot
• Ranging robot
• News robot
• Breakout robot
• Scalping robot
• Grid trading robot
• Correlation trading robot
The newer Forex robots hitting the market now have a combination of these strategies, the most common being a combination of trending and ranging. The allows the robot to continue to make profits in a variety of market conditions.
There are only three things required to get started trading with a Forex robot:
• a PC and broadband accesses to download the MT4 platform
• a broker that support the MT4 platform (there are hundreds of them)
• download a Forex robot and attach it to a chart according to the required settings.
Despite what you may read on Forex robot sales sites no Forex robots can guarantee profits. The Forex market is too volatile to get all trades right. What a Forex robot can do is improve the odds or probability of making more winning than losing trades. With tight money management (which should also be automated) and committing only a small portion of the account to open positions, you stand a good chance of making money in the long run.
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