Many traders will happily extol the virtues of a forex robot- essentially a piece of software that does all the thinking, trading and account management for you. However while they seem like a brilliant idea there are just as many reasons to avoid them as there are to use them. Read on for a look at some of the main pros and cons which could help you decide whether you should make use of a forex robot.
Technically speaking, those using a forex robot need not actually have any knowledge of the foreign exchange market. For people who have some money they would like to invest on the fx market but no clue as to how- it could be a good option, especially for someone who is not expecting to be in it for the long term and therefore doesn’t want to spend months learning the ropes.
Another great advantage is that a forex robot doesn’t need any sleep- or a day job! Trading robots are able to trade whenever the markets are open all through the week, day and night. Not being human has other advantages too; the software doesn’t get tired and doesn’t suffer from the emotional roller-coaster of trading.
Forex robots are also capable of managing more than one account using different strategies which means they can be the ideal choice for those who wish to spread the risk by using more than one tactic.
Not being a human has many cons of course and a forex robot shares the same problems of any computer software. It could malfunction during a trade, it could leave your computer more open to viruses because the internet is left on 24/7 and it could also cause a malfunction which ends up costing you more than it’s made.
Not all brokers are prepared to trade with robots which could put limitations on your trading. One of the biggest reason traders avoid robots however, is the sheer cost of installation. This is not a cheap piece of software we are talking about and you may need to adapt your server for it, making the initial costs quite high. Finding a legitimate robot is also a minefield with many providers promising amazing results which the software does not live up to.
Overall, new traders in particular are advised against robots- even though it seems like the perfect option for newcomers; it’s much better for a new trader to learn the way of the fx market though a demo account first. However, for busy types who know what they are looking for it can be a good option – especially for traders who want to use more than one strategy and trade throughout the night.