What are the Advantages of Forex Robots

Traders from all walks of life use robots or rather algorithms to automate their trading strategies. The use of automated trading strategies is not limited to Forex trading. Banks, Hedge Funds, Market Makers, Crypto traders and Futures and Options traders all use algorithms to trade on their behalf. The idea of using trading bots is well established in the online trading industry, but it’s hard to get your head around the concept. In this article, we shall explore the advantages of Forex robots. 

Forex Robots Remove Human Emotion

The first of many advantages of Forex robots is they eliminate human emotion from the practice of trading. Forex traders are incredibly vulnerable to the disposition effect. This behavioural phenomenon is the habit of traders holding onto positions that are not just unprofitable but continue to trend against them. Traders refuse to close them at a loss and end up closing them at a much greater loss than they should have allowed. Sometimes, traders will let an unprofitable position blow their account entirely. 

Similarly, traders often close profitable positions too early and don’t allow the trend to complete. When you combine the idea that traders allow their unprofitable positions to lose excessively and don’t let their profitable trades gain as much, eventually their account will be burnt. 

There is a common belief amongst new forex traders that brokers deceive them, when in fact, brokers don’t need to cheat traders. Many traders will slaughter their trading accounts without any influence from anyone else. 

By using an automated Forex trading robot, you can design your strategy while you are calm and clear-headed. When it comes time to trade, you allow the robot to execute your earlier instructions. Your fear of losing or second-guessing yourself is excluded. 

Forex Robots can Process More Data than Humans

One of the great things about the Forex market is there is never a shortage of opportunities. Most brokers offer more than fifty currency pairs; some offer even more than that. However, traders are incredibly limited in terms of what they can process and that drastically limits your opportunities. You may often see traders with dozens of indicators spread across several charts on multiple monitors. You can’t fully pay attention to all of that information. It’s exhausting. 

Advantages of Forex Robots - More Data

Could you concentrate on everything happening on these charts?

 

An important advantage of Forex trading robots is that you can assign them to trade on as many trading pairs as you wish. Not only that, but you can also program them to analyse data from different timeframes too. 

Forex trading algorithms can even become so complicated that they analyse one currency pair to extrapolate potential opportunities on other currency pairs due to certain correlations and patterns. For example, if the price of Oil increases, the US Dollar may also increase with it because traders and industry will require more US Dollars to purchase the volume of oil they need. 

Forex Robots Ignore Sentiment and Fundamentals

If you’re interested in trading Forex, you probably pay close attention to economic and geopolitical news. Many traders read news headlines and statements to help understand what’s happening in the world around them. This is a healthy approach as you can add context to mid-to-long-term trends. 

If you read a headline stating “US Economy Drops 30%”, you might think “oh gosh, the Dollar is going to drop right now”. The problem is this news usually reaches the average trader last. Many others higher up in the food chain have been privy to this information before you. It means the news or story is already baked into the price you see as you read the news. You might think that a report of this magnitude will have a significant effect on sentiment towards the US economy and therefore the US Dollar, however, it’s much more complicated than that. There are far too many things affecting currency prices, and it’s rare for one single topic to shake the value of a currency, especially the major ones. 

While the opinions of traders are easily swayed, Expert Advisors only care about the technical information. If the news has affected the price, your Forex robot already knows about it. 

Should you Use a Forex Robot

Besides the three main points made in this article, there are many more advantages of Forex robots. However, nothing comes with only upsides; automated trading strategies do have some disadvantages which we’ll cover in a future article. 

If you’re ready to take your interest in Forex Expert Advisors to the next level, we have two trading bots available for sale on our website. Both have proven to be very successful and received exciting feedback from our users. 

Our SFI EA is an automated trading strategy based on our best selling SFI Indicator which is being used by thousands of Forex traders right now. 

Our SCALP EXPERT Bot is also highly popular for scalpers as it significantly increases the efficiency and therefore, profitability of scalping trading strategies. 

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