Finding the Right Forex Robot
Forex robots have become vastly popular over the past few years. As you may already know, the Metatrader 4 (MT4) platform is used to trade your robot because of it’s built in programming language and automation capabilities. In fact, the extreme popularity of Forex robots is due in part to the widespread use of the MT4 platform.
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The growth of the MT4 platform is not the only element of the widespread popularity of Forex robots. This article will show you how to filter through the overabundance of Forex robot sales pitches in order to find the best Forex robot for your trading style. We will teach you what you need to know about your EA and what your realistic goals should be. Finally we will touch upon some of the other players involved in the Forex robot game and how to best utilize them to maximize your chances of success.
A Forex robot, also known as an expert advisor or a Metatrader EA, is a trading system/strategy that has been quantified, automated, and coded into a program. If you are able to find a winning robot that coincides with your trading style/arrangement, you can be very successful in Forex trading. On the other hand, because Forex trading is risky, if you are utilizing an unsuccessful robot, you can lose all of your money. In an effort to try and avoid this, we will be reviewing some key factors to look for when selecting a Forex robot later in the article.
It is safe to assume that if you have made the decision to purchase a Forex robot, then you plan on making some money in the vast Forex market. However, “making money” means different things to different people. One person may be content making $20 per week while another may be seeking millions from the use of their Forex EA.
The best Forex robot for you is going to depend greatly on your appetite for risk. Before you embark on your Forex trading journey, you will have to decide how much you are willing to risk. With your risk appetite on hand, you need to look for robots that suit your trading style and analyze various statistical factors including maximum drawdown, profit factor, expectancy and efficiency. A majority of this information can be found in the best Forex robot report (www.bestforexrobot.com).
Generally speaking, the robots that make more tend to risk more in turn. Therefore a person that wants to make 10-20% per year on their investment may not be looking for the same robot that a person seeking a 1000% per year return on their investment would be. This nails down the point that your expected return is a huge factor in determining which robot is right for you.
You need to remember that the results that robot vendors display are often simulated and it is therefore essential to test your robot on a demo account before risking your hard earned money. Chances are, finding the right Forex robot for you will cost you both time and money. There are many things to pay attention to when choosing the best Forex robot for your trading. Much of the key statistical information needed to make a sound decision can be found in the best Forex robot toolkit. In this article, we will focus on one very important criterion referred to as robustness.
The majority of Forex robots only work effectively in certain types of markets. For example, some perform better in range bound markets while others are more effective in trending markets. However, it is often very difficult for a trader to determine if the market is in a range bound or trending. In order to achieve success with a Forex robot you should not give up the gains that it makes during a favorable market when the market is unfavorable.
To clarify this lets use an example. Let’s assume you have a robot that performs well in a range bound market. As soon as the market starts to trend you will run into issues and begin losing money. To attain success with this robot you must not lose money during the trending market that you made during the ranging market.
In order to test if your robot is sustainable you have to test it, back and forward, through a range of market conditions. If you find that the robot sustains its profitability, then it can be considered robust. With this in mind, you must always remember that past results are never an indication of future performance.
In the above, we discussed back and forward-testing as being critical items in determining robot’s robustness. What exactly do we mean by back and forward-testing? Back-testing is testing the robots success based on historical data while forward-testing is based on real time data. Both types of testing are essential to your robot’s success.
Before you purchase a robot from a vendor, you should assure that it has been both back and forward tested by the vendor. Furthermore, you will need to run your own back-testing in Metatrader.
A good Forex broker can show you how to do this. On the same note, you should absolutely run the robot on a demo account to forward test it with fake money before taking it live. When back and forward-testing he robot, if it becomes evident that it is unacceptable based on your goals, you should return it if possible. If it turns out that you are happy with the robots performance, you should run it on a live micro account at first so you are not risking a lot of money.
Another key component to your Forex robot is the Forex dealer, an IB that you use for your trading. Choosing the appropriate dealer and taking advantage of the various perks and services offered by Forex IB’s can be the difference between success and failure with your Forex robot in some cases.
A great way to work with reputable broker while experiencing favorable trading conditions is to trade your robot with a Forex IB. Among other perks, they can reduce your transaction costs by providing you with cash bonuses for every Forex trade you make. For example, if your robot trades 30 lots per month and you are receiving a rebate of $5/lot, you will get $150 for free every month. This adds up to over $1500/yr just for trading. This will both enhance your trading success and help pay for various Forex robots and products that you may want to purchase in the future.
After reading this text, you should feel confident about choosing a Forex robot that is best for you and your style of trading. To review, it is key to determine if your robot is robust and in line with your expectations of return. If you follow the guidelines outlined above, you will be one step closer to achieving Forex success.
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Frank O’Connor is a professional Forex trader and a market analyst for BestForexRobot.com. Best Forex Robot offers a variety of complimentary tools to enhance the success traders using Metatrader Forex robots. When you download the complimentary Forex robot toolkit you’ll get a risk management indicator, Metatrader EA report, and Forex broker review guide. Get your Metatrader EA tookit today at the Best Forex Robot website.
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