Yes, forex robots do work but there are many things to consider before you use any automated forex trading system. You are doing to be trusting a trading algorithm to place trades and manage your account on your behalf. Therefore, you need to know what you are looking for and choose wisely. With so many forex robots to choose from, it can be a difficult task to separate the good from the bad. Every forex trader has a preferred trading style, some are happy to take extra risk for a bigger reward, others are more conservative and want a stable forex robot they can use for the long-term. This forex robot guide will help you to understand more about forex robots and what to look for if you are thinking about using one.
What is an automated forex trading system?
An automated forex strategy is a software that you run on your trading platform. You can simply place a forex robot on your currency pair charts and it will analyse the for buy and sell signals according to its built-in trading algorithm. When the fx bot finds a valid trading signal, it can take a position and manage it for you without you needing to do anything. This makes forex robots a popular choice for traders who might not have the time or knowledge to trade manually.
What forex robot settings should I use?
This really depends on you risk preference and the forex strategy which the robot is using. The majority of forex robots come with default settings or set files for each currency pair and timeframe that they trade. The robot developer should have spent a lot of time coding and testing the bot so they can provide you with optimised settings which have performed best historically speaking.
Most forex robots come with input settings that you can adjust when you attach them to the charts in your platform. You should be able to amend the lot/risk size to a level that is suitable for your account and which you feel comfortable with. Other adjustable settings can include any technical indicators the bot uses, money management, trading hours, days, news filters and more.
How do I optimise a forex robot?
You can always optimise a forex robot to try and find the best settings over historical data on your favourite currency pairs and chart timeframes. You will find that the majority of automated forex trading systems have been developed to run in the MetaTrader platforms. These robots are commonly known as “expert advisors” or EA’s for short.
The good thing about forex expert advisors is that you can optimise all of the settings using the MetaTrader strategy tester. This lets you choose all of the input settings and values that you would like to optimise to try and find a combination that produces good results over the data set that you are using.
I like to use Birts Tick Data Suite for optimising forex EA’s as it supports tick data with variable spreads and commission included. It also has a slippage feature and adjustable timestamps. This helps to ensure that we can get the most accurate backtests possible in the MetaTrader 4 (MT4) platform.
What is a forex EA backtest?
When choosing a MetaTrader forex EA to use, I would always make sure the developer has provided back tests showing how the expert advisor has performed over a good amount of historical data. I would look for 99% modelling quality and ensure they have accounted for spreads, commission and slippage. These are all factors that can have a significant impact on the results of any automated forex strategy.
You might see forex expert advisor developers who only show back tests on one currency pair for a short period of time. This can mean that the EA has been over optimised for that particular data set. I prefer it when we have back testing results over at least 5 years of historical data and on multiple currency pairs. I think this helps to eliminate some of the “curve fitting” that can occur when backtesting EA’s.
If an auto trading system has good backtesting results using the same settings across different currency pairs and over the long term, it gives me more confidence in the forex strategy that the software is using. This is something that the Forex Robotron EA does as an example.
Do automated forex trading robots work?
Yes, they do work. However, nobody can predict what will happen in the forex market 100% of the time. There will always be losing days, weeks, months and even years with any trading strategy. It is impossible to guarantee results which is why I would personally avoid any forex robot developer that makes claims you will earn “x” amount of money over “x” amount of time.
Instead, I would be looking for real live accounts results that have been verified by a third-party such as Myfxbook. They will ideally have been running for at least 6 months and have all of the important statistics available such as drawdown, profit, loss, profit factor, average win, average loss, etc.
In addition to real forex robot results, I would want to see top quality back tests over many years of data on all of the currency pairs that it trades. Whilst good historical results do not mean good performance moving forward, it can give you an inclination into the type of automated forex strategy the robot is using and how it has held up through different market scenarios.
How much profit can you make from automated forex trading?
This is impossible to say as it depends on so many different variables such as the position size you are using, broker conditions, market situation and trading strategy the robot uses. I have seen the same forex robot give completely different results due to the brokers spreads and settings that the user has opted for.
There are forex robots that aim for conservative gains over the long term, whereas there are others that use dangerous money management such as grid trading or martingale strategies to try and hit a home run. Whilst these may make some pips to begin with, more often than not I have seen them cause huge drawdowns and blown accounts.
One user may start using a forex robot that goes on a great run for a couple of months but then has a bad month. If another user had started using the robot during the bad month, they might be shouting “it is a scam” without understanding that no forex strategy can be correct all of the time.
I would say to have realistic expectations and not think you will become a millionaire overnight. Even the best forex robots can go through periods of drawdown just as the most famous traders and investors in history have.
Can you make money with forex robots?
Yes, you can make money with forex robots by using them to trade on your account or even by coding them for other traders who are looking to automated their forex strategies. However, you can also lose money using a forex robot just as easily.
In fact, from all of my forex robot reviews that I have done over the years, there are literally only a handful that have consistently produced results over the long term. I have seen so many come and go in my time, with some robot developers simply removing accounts that have crashed out and replacing them with new ones until they do the same.
This can be misleading which is why I would always look for a forex robot that has long term results and been around for years, the Forex Flex EA being an example.
Just don’t expect to make a minimum amount of money with any manual or automated forex strategy as this is trading and anything can happen.
Can I use a forex trading robot?
Yes, anyone can use a forex trading robot. All you need is an account with a forex broker and a trading platform such as MetaTrader to run your robots on. Most forex brokers will provide you with a free demo account which I think is vital for testing a forex robot without any risk. This will give you an idea of how it trades to see if it is for you.
One of my best forex robots for manual and automated forex trading is IC Markets. This is because they have tight spreads from zero pips, low commission fees and deep liquidity for quick trade execution speeds. This makes them a popular choice for traders who are using forex scalping robots. They also have excellent customer support and a good variety of account funding methods.
Is it good to use forex robots?
It really depends on the type of trader that you are. If you don’t mind taking a hands-off approach and are happy with the risks involved with automated forex trading, then they can be a solution worth considering. If you just don’t have the knowledge or time to trade manually, you might also want to look at a forex robot instead.
I personally don’t think anything can beat learning how to trade manually by yourself. This will give you full control over your trading whilst allowing you to understand more about the forex market and how it works. It can help you to learn from your mistakes and become a better forex trader in the long run.
The thing about some forex robots and forex signals, is that they can work for a period of time then just stop working. The bot developer may no longer support it or update it to keep up with the current market conditions. On the other hand, a forex signal provider may just disappear and stop providing signals. At least when you know how to trade, you don’t need to depend on anyone other than yourself.
How do I start using automated forex software?
If you want to start using an automated forex system, you can find plenty in the MetaTrader marketplace which is accessible from directly within the platform. There are many free and paid forex robots with all types of trading strategies that you can choose from.
You will also find plenty of different websites promoting and selling forex software, so shop around and see what you like the look of. You can also try my free forex robot if you like. It has lots of technical indicators and candlestick patterns built-in for automated forex trading.
Automated forex trading vs manual trading
The main advantages of automated trading are that you do not need to have any knowledge of the forex market or spend countless hours analysing charts. The disadvantage is that forex robots cannot always see things that the human eye can.
They might not be aware of a major economic event that is having a significant impact on currencies which can cause unnecessary losses. Yes, there are some expert advisors that do have built-in economic calendars, but even they cannot account for “black swan” events.
When trading forex manually, you maintain full control over your trade decisions and money management. You can use any combination of market analysis to decide if you will enter or exit a position. An auto forex strategy is usually very rigid in the sense that it will do exactly what it is programmed to do without giving consideration to what is actually happening in the market.
Manual trading can take many years of practice before you start seeing consistent results. There is the chance that negative trader emotions such as fear, anger and greed come into play. A forex robot is discipline in the sense that it will stick to the trading algorithm regardless. However, a forex trader might see some price action that a robot cannot.
As you can see, there are advantages and disadvantages to both manual and automated trading. You should weigh them both up and decide what works best for you because every trader is different.
How to avoid forex robot scams?
The main problem with automated forex trading is that there are so many forex scams out there which you need to try and avoid. This does not mean that all forex robots are scam. There are some very well coded automated systems based on sound logic with sensible money management. Just because a forex robot does not make a ton of money or goes through a bad spell, this does not automatically make it a scam.
In terms of forex robot scam, I would personally avoid anyone who makes claims on how much money a forex robot will make. Nobody has a crystal ball to predict that and even if they did, they would not be selling it. If there are back tests, make sure they are good quality and over a long period of time on all the currency pair that the EA trades.
What is the best forex robot?
As I mentioned earlier, there are a few forex robots that have withstood the test of the time. I have reviewed and tested thousands of forex robots over the years, here are my best forex robots. Just keep in mind that the best automated forex system for you will depend on your trading style.
Whilst real results and back tests are 2 key things to look for, you should also give consideration to the forex strategy being used in the robot’s algorithm to make sure it is suitable for your needs. E.g. If the robot has high drawdowns and this is something you don’t like, you might want to look for another option.
Advantages of automated forex trading
- Do not need to spend time analysing charts
- Do not need any specific forex experience
- Lots of forex robots to choose from
- Can check historical performance
- Can check verified real live account results
- Customisable settings according to your trading style
- Can always test on a demo account to begin with
- Prevents human emotions from making mistakes
Disadvantages of automated forex trading
- Lots of forex scams to avoid
- Some of them are poorly coded
- Cannot account for things the human eye can see
- No guarantee of what results you will get
- Might be restricted to specific broker or platform
Conclusion: should I use an automated forex trading robot?
If you are looking for an automated trading system, then a forex robot can be the ideal solution. They can save you time and allow you to buy and sell currency pairs without needing any specific experience. However, they cannot guarantee results and you will not improve your trading skills in the process.
Alternatively, you could open a forex demo account and practice your own forex trading strategies. You could even use a social trading broker such as eToro to copy the signals of other traders. This is similar to automated trading but has some more transparency when it comes to selection.
Self-confessed Forex Geek spending my days researching and testing everything forex related. I have many years of experience in the forex industry having reviewed thousands of forex robots, brokers, strategies, courses and more. I share my knowledge with you for free to help you learn more about the crazy world of forex trading! Read more about me.