The largest trading market in the world has created many millionaires. The internet is filled with stories of how people barely surviving earned hundreds of dollars overnight in the Forex market. These stories often make people think that Forex is easy money.
However, that’s not the case. The Forex market can be ruthless and snatch your hard-earned money from you. Thus, do not think of this market as a money-minting arena. If you are fascinated by this money market and want to earn a couple of bucks, here’s what you can do:
Acing the Forex market requires sharp trading skills and the ability to forecast the price direction. It takes years of practice to sharpen your skills, understand the market, and open a profitable position. However, technology can help if you want to start trading right away.
Forex robots are quite popular in the Forex world because of the multitude of benefits that they offer. Automated trading can trade around the clock, open or close positions automatically, and buy or sell a currency according to set parameters by the trader. Automating your trading accounts can keep you ahead in the market and help you score profits in your account.
Another benefit of a Forex EA is a 0% chance of emotional trading. Trading decisions made in anger, greed, thrill, and fear have a high probability of backfiring and risking your invested capital. But, with a Forex EA, there is no chance of emotional trading. The EA will buy or sell the currencies according to their parameters.
So, does that mean Forex EAs are a surefire way to succeed in the Forex market? Or do Forex EAs fail too?
Let’s find it out in the below paragraphs:
Do Forex Robots Fail?
Many beginner traders believe Forex robots are a magical tool to help them earn good bucks in no time. Yet, this is not the case. Forex robot is a computer program that helps a trader to trade better. However, they do not guarantee 100% success and grand profits.
If you come across a Forex robot that claims a 100% winning rate, run as fast as possible.
Why?
Because it’s a total scam and will strip you of your money. Forex is a highly volatile market, and nobody knows anything for sure. Hence, never fall for the lucrative lies of massive profits in a short time.
5 Major Reasons Why Forex Robots Fail
A Forex robot can fail in the market and deprive you of the profits you dreamt of. Here are 5 major reasons that explain why Forex robots fail:
Difference in Account Types and Price Data
The first and most common reason for Forex bots’ failure is the different brokers and account types. Different brokers in the market have different price data. Because of this difference, the trading strategy of the Forex bot creates unlike entry and exit signals on different accounts.
Moving on to the 2nd reason, which is:
Chances of Missing Trade
A Forex bot is a sophisticated computer program, which means it is prone to miss trade if there is a problem with computer hardware or poor internet connection.
A missed trade ruins the consistency of the trading pattern of the Forex bot.
Up next, we have the 3rd reason for the failure of Forex EAs.
Slippage on Entry and Exit
There might be slippage during the entry or exit of each trade. This slippage further adds to the cost and ultimately influences the end result.
Moving on to reason number 4:
Fluctuation in Spread
Spreads on trading accounts frequently change, particularly when important economic news is anticipated or about to be released.
The last reason on our today’s list is:
Poorly Programmed EAs
There are hundreds of Forex robots in the market, each claiming to be powerful and best for traders. However, some of these Forex bots are good for nothing. They are poorly designed and incompetent to keep up with the fast changes in currency prices.
Because of these useless bots, many traders suffer and lose their capital.
The following tips will help you select the powerful Forex bot and reap substantial profits.
How to Get the Most out of Your Forex Bot?
Conduct a Thorough Research
The first step is to do some study to identify a Forex robot that can generate actual pips for you. Check to see if customer service responds to your emails and support requests for the product. Examine whether the robot employs a tried-and-true trading strategy based on sound trading theory and logic.
Finally, ensure that the robot is created by a reputable developer with considerable experience in the Forex market.
The second tip for making the optimum use of the Forex bot is:
Select the Appropriate Lot Size
Overtrading is one of the most common blunders that beginners make. They make the mistake of not having adequate funding in their account to open at least 3 Forex trades with enough space for the downside.
As a result, a margin call is issued, which can be fatal for a trading account. To avoid this, start with little investments and work your way up. Furthermore, the negative balance protection feature in Forex robots assists traders in preventing making this detrimental mistake.
Moving ahead, the 3rd tip is:
Check Past Records
An EA must be capable of offering precise historical data on backtests. This ensures that the trading strategy is effective and will provide the most opportunity for profit. Traders should always look at measures like drawdown rate and yield to see if the approach is worth their money.
Forex robots with large drawdowns indicate that the EA employs a risky or dangerous trading approach.
The 4th tip to make the most of a Forex bot is:
Using the Robot Correctly
Finally, ensure that the Forex robot is properly configured with your broker. Most reliable EAs include a user setup manual and a customer service phone number in case of problems.
EAs that offer recommended brokers are usually simple to set up. You should also give it some time to start delivering fantastic results.
Over To You…
Automated trading can have pros and cons for Forex traders. Plus, there are some risks attached to it. However, by conducting deep and extensive research, you can choose the best and most powerful Forex EA in the market.
Forex robots can make your trading easier and quicker. It eradicates the need to be present throughout trading hours. Simply set the parameters, and relax. The Forex bot will do everything without requiring your constant supervision.
Good luck in finding the right Forex EA.
