A forex robot is a type of software that enables traders to conduct foreign exchange trading automatically without the trader having to make trading decisions on his own. The majority of forex robots are built upon a metatrader platform and make foreign currency-pairs buy or sell decisions. These types of robots have become very popular in recent times and while some traders fully embrace them, others are a bit sceptical about using them. Forex robots come with both advantages as well as disadvantages.
One of the most attractive features of forex robots is that they make foreign exchange trading simple. The trader relies totally on the forex robot to make buy or sell decisions based on various market signals. This takes the pressure off of the trader and simplifies the decision making process. Many traders appreciate the fact that they don’t have to spend the time to study the markets for themselves and the fact that these forex robots can help them to make profits without them having to get totally involved in the process. The key to making profits with forex robots is finding a great trend.
One disadvantage of using forex robots is that you may end up being scammed and losing all or most of your investment. The use of these robots is not regulated like the regular foreign exchange markets and therefore they are prone to scamming. In addition, the trades that forex robots make are based on past performance. They don’t have the ability to look ahead and to foresee what may happen on the foreign exchange markets in the future. They are therefore limited in that respect.
The key to using forex robots effectively is to not rely on them totally for all your trading activity. Diversification is key.