What Are Forex Robots And Do They Work?

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What Are Forex Robots And Do They Work?

Summary: What are forex robots? If you haven't heard of them, don't worry. These little gadgets have been popping up in all sorts of industries, though mainly in areas where there is money at stake! As the name implies, it is possible to have your foreign currency trades automated by these handy little gadgets. We discuss them in more detail below.

Forex robots became popular with the development of their commercial versions. Similar automated 'bots' are also available to play poker and blackjack, gamble on horse races and more! The advance of this technology - when combined with an API (an application programming interface) - means that criteria can be applied so that trades are only made under certain (very) specific conditions. Amazing huh?

These robots are not something new, many successful traders have been using forex trading robots for years to automate their trades.

The following is an example based on the forex trading MT4 platform. The platform provides a variety of tools for technical analysis.

If you are just starting, you need to learn the platform with all its capabilities. This is a very powerful platform and there are lots of basics to learn before trying to automate trades.

Once you get familiar with the platform, it pays to get familiar with the indicators provided. They can also be download as required. Most of them are provided for free unless it is a custom-made, profitable indicator.

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Now start putting the indicators on the charts for different FX pairs and different timeframes. In the analysis part you will need to discover a trigger – something in your system that is indicative of a specific market move. When you find such correlations you are almost ready to develop your own Forex robots.

To do this, decide upon your entry and exit strategy, timeframe to trade, stop loss points and other important aspects. Now you are ready to create your own software program using the MT4 platform’s native programming language. This kind of software on MT4 platform is called an Expert Advisor or EA. These EAs are in fact what is known as Forex robots!

This piece of software can run on your platform and enter and exit the trade based on the specific market conditions without any involvement on your part. What genius! Presuming that you have profitable settings of course...