There are several ways to avoid manual trading, and trading robots are one of them, along with copy trading, trading signals and account management.
However, trading bots, aka expert advisers, have an ambiguous reputation. Some say that those bots are completely useless, and you can’t earn a dime with them. But some people say that they utilize them to gain enormous profits. I guess we have to look at this topic to find out who is right or wrong, shall we?
First of all, I believe the truth is in the middle, as always. Having had some experience with robots in trading, I can say that there are algorithms that are not viable by any standards. For instance, the majority of free robots that you can find on the internet are total garbage, to say the least.
But it doesn’t refute the fact that there are robots that can bring substantial revenues to its owner.
Yet, those bots are usually crafted according to some peculiar trading strategy, and you can’t find them out in the open for free.
I remember testing some trading robot that came with a custom indicator explicitly created to track one arbitrage strategy.
In a nutshell, this algorithm opens deals according to the correlation matrix between two similar pairs, like AUD/USD and NZD/USD, or EUR/USD and GBP/USD. So, the quote currencies have to be the same.
When the correlation indicator reached certain values that were set by the trader, then the bot opened two orders on those pairs in different directions. And when the numbers converge at some point, the robot closes both deals with the average profit.
This robot gave decent results in the short term but struggled to maintain the same level of profitability in the long run. Even though I tried to adjust the settings in any way possible.
This leads us to the main point of my rant: all trading bots that are worthy are the custom ones, and you need money to make them. Also, those custom bots require proper tuning and monitoring according to the market conditions to extract money from them.
I suppose there is another category of trading robots that almost nobody knows about. I’m talking about the high-frequency algorithms that are used by the market makers and other institutional trading entities.
The price of those robots can be up to millions of dollars, and surely you won’t have access to them in any way, shape or form.
So the answer is yes, forex robots work. Still, you have to either buy a proper one for a considerable amount of money or gain trading knowledge to be able to create one by yourself.
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