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Can Forex EA Robots Trade Better Than Humans?

Computer technology is proving itself in our daily lives, from self-driving cars joining the big city taxi force to online assistants booking restaurant reservations. As a result, it should come as no surprise that powerful robots are now widely used as forex auto trading robots. What exactly is a forex robot, though? How do forex robots assess market conditions, and are they truly the best option for traders of currency pairs and other similar assets?

Automated trading with a forex robot

Part-time traders are increasingly turning to forex robots or expert advisors. This is due to the primary benefit they provide… time. Top forex robots are now taking all of the work out of working from home, but most forex robots have some advantages and disadvantages. They are still fallible, even if they can multiply your daily trading volume a thousand times. After all, if trading robots worked 100% of the time, everyone would be making money on the stock market every day and sipping cocktails by the pool. Let’s keep it real and look at the benefits and drawbacks so you can decide whether or not you want a bot.

The financial market is all about balance. A yang yang of the money world. For someone to win, someone must also lose. Your goal as a trader is to become profitable and stay that way, and forex robots can help with that, but you can still lose money using a trading robot. Like many of us, robots can have a bad day too.

Who uses forex robots?

Many people have never heard of forex robots, and many more have never heard of online trading in general. Surprisingly, some people are familiar with forex but refuse to use trading robots. Forex robots are viewed by some traders as nothing more than an ineffective automated trading tool for slackers. This is, however, a gross exaggeration.

In fact, most brokers are surprised to learn that a large percentage of first-year traders do not use automated trading. Is it because they’re ineffective? Most likely not. The creators of Forex robots report their results quarterly, and a large number of them claim to be much more profitable than the average first-year trader.

For people who don’t know how to do technical analysis or don’t have the time to monitor economic events, a Forex robot makes sense. Trading robots are widely used in the financial world, and they are a superpower that sets big investing companies and hedge fund managers apart from home traders.

Traders nowadays have an abundance of options. Exness traders can use the Exness WebTerminal to trade on any computer, or they can use the Exness Trader app to trade on the go, but serious traders prefer to trade on a PC. Trading on a PC with the MetaTrader platform gives you access to a wide range of trading bots, so if you’re thinking about automating your trading, set up a trading account at hom. Exness provides MetaTrader and even a free VPS to shave milliseconds off trading response times and reliability. Milliseconds? Yes, milliseconds. Why is that so important?

Time is money

Milliseconds may not matter much to someone just starting out, but for experienced traders who have significantly increased their trading budget, every millisecond counts. One bank spent millions of dollars laying superfast fiber-cable between Chicago and New York to gain only thirteen milliseconds. The importance of reaction time in trading cannot be overstated. And when it comes to execution speed, robots are unrivalled.

The best forex robot developers all claim that their trading robots can trade faster and better than humans. In microseconds, forex robots are said to analyse real-time market conditions, target the best forex trading opportunities, and so on.  forecast the direction, and with fully automated efficiency, make the trade. It all sounds very convincing, right?

That’s because the best forex robots can, for the most part, outperform the average human when it comes to forex trading. A human forex trader requires time to conduct technical analysis, and then there are emotions and concerns about the trading strategy’s effectiveness. Even big banks use automated forex robots on currency pairs and other money-related assets because minutes and even seconds of indecision can cost a trader valuable points and pips. You might be thinking, “Well, that’s great for banks,” but can expert advisor robots help regular people as well? Would you feel comfortable giving a forex robot access to your hard-earned money?

The forex robot: the evolution of trading

Forex trading on the global markets is no more difficult than chess for an expert advisor or forex robot. And we’ve all seen how good robots are at chess. Deep Blue’s victory over Kasparov in 1997 gave the rise of the machines a whole new meaning. According to technical analysis, there are 121 million possible chess combinations after the third move. Deep Blue was unfazed by them and astonished everyone.

When the world saw how quickly these next-generation robots could think, tech companies considered the implications of applying it to forex trading right away. That was more than two decades ago. Over the last two decades, advances in robot intelligence have increased at an exponential rate.  and today’s expert advisors make Deep Blue look like a calculator.

There are numerous factors that influence trading asset prices, and for forex traders, identifying opportunities and making real-time decisions can be a full-time job. The economy of a country is important, but so are political alliances, trade agreements, and bank announcements, to name a few. Because currency pairs are traded in forex, the amount of complication can be doubled, as the aforementioned influences affect both currencies and nations. It can take a long time to complete. A forex trader can spend the entire day looking for the best trading conditions. A trading robot, on the other hand, can execute dozens of trades per second.

Automated forex: robot trade forecasting trading

Although forex robots cannot travel through time, they can analyse multiple market movements and compare them to thousands of indicators and professional strategy-based conclusions. The best part is that they can do it in milliseconds all day.

Fully automated trading robots keep a digital record of market conditions. Every second, a forex robot performs millions of calculations in search of patterns. It watches what happens in the minutes, hours, and days after it recognises certain repetitive conditions to see if the forecast is accurate.

Forex robots also assess and adjust the threshold for when a forecast is suitable for use. How many times does a pattern have to produce a useful forecast? It is far from a precise science. If a trader tests a pattern for too long, he or she will miss out on the accuracy. If you use the forecast too soon, the pattern may not hold. How many times should you test a pattern? How about three times? How about ten times? The robots do this as well, but the criteria aren’t set in stone. Trading with a robot is not foolproof, and any forex broker or robot developer who promises otherwise should be avoided.

Top Forex robots use trading indicators

The moving average is perhaps the most well-known–and possibly the best–trading signal of all. On a forex chart, a moving average is an algorithmic calculation that generates a smooth rounded line running along the pointy spikes of a price line. When the price lines of currency pairs cross the moving average, it signals an impending price reversal and a potential trading opportunity.

This parameter, as well as thousands more, is included in the best forex robots, which are all running at the same time every second of the day. Imagine being able to run dozens of indicators on hundreds of different trading pairs all day. What if all of your active indicators point to a price movement for a single asset?  That’s one of the ways that forex robots identify opportunities.

Stop Loss and take profit

The best way to ensure the safety of both robot trading and manual trading is to use two very powerful tools. Traders who know what they’re doing set their investment limits based on the amount of free margin (available funds) on their account, not on a whim. The Stop Loss tool, which automatically closes the trade if the markets go in the wrong direction, is a general recommendation.

Make sure the Take Profit limit is set to an acceptable level so you don’t miss out on the next price reversal. When using forex robots, the take profit and stop loss tools work the same way for all assets, and they will always stick to your initial parameters without exception, emotion, or doubt.

Which forex robot forecasts the best?

dailybluepips does not recommend a specific forex robot. The best forex robot of today might not be the best forex robot of tomorrow, and since we at dailybluepips can’t predict how a forex robot update will affect its future performance, it’s impossible to point to one robot. Moreover, you might be reading this article weeks or even months after it was published. Whatever was hot at the time of publishing could have fallen to a faulty update. 

Remember how we discussed the weather? If you’ve ever relied on weather forecasts from a news channel to help you plan your outfits or outdoor activities, you’ve probably left the house with an umbrella you didn’t need more than once. You’ve probably planned a trip to the mountains or gone for a walk around town and been caught in the rain. The accuracy of today’s weather forecasts is questionable. This is due to the fact that the models that have been built using decades of data no longer match our current environmental conditions. Most weather models have been rendered useless due to pollution and global warming. Thankfully, robots are now on the job.

The forex markets, like everything else, are constantly changing. A forex robot’s data, which it uses to make real-time forecasts, must be adaptable to those changes. They must be updated and recalculated on a regular basis. Simply put, depending on the updates, you may need to change the robot you’re using every few months if you want to trade forex with a robot.

Forex trading forums are the best place to keep up with the latest news. Traders are extremely helpful in keeping the trading community informed. Forex traders are unconcerned about reserved rights. Become a member of trading blogs and Facebook groups. Traders quickly expose those robots that have been updated only to see a drop in profitability. Perhaps look for complaints. If a robot is doing well, traders tend to enjoy the benefits in silence. They get more vocal when a robot loses traction.

The Truth About Forex Robots

I’d love to provide you with statistics and show you that the best forex robots are better than traders doing it for themselves, but that wouldn’t be completely accurate and could be misleading. Some of the best robots post performance statistics claiming 85% to 92% success. That means that for every trade they make, they are right more than they are wrong. Sounds encouraging, but there’s something you need to understand.

Artificial intelligence is not what Forex robots are. They don’t have a digital brain that can think in the future. When you see a forex robot promotion, you’ll hear the term “algorithms,” which is just a fancy way of saying “rules.” Forex robots are simply a tool to help you improve, multiply, and speed up your trading. Yes, they are powerful, but you set the rules they must follow.

You are the one who decides which assets are best for you. Your trading budget is restricted by you. You also get to choose what levels of profit and loss you’re willing to accept. Based on the patterns of the assets you’re interested in, the robot uses its massive computing power to determine the best time to open and close orders. Imagine cloning yourself one thousand times and then sitting back while your clones do the work. Again, it sounds great, and if the forex robot you are using has a consistently high level of performance, then you’re in good hands… but things can go wrong.

Forex robots forecast future prices using historical data, but every professional trader understands that past performance does not guarantee future results. As previously stated, models are constantly changing and evolving in order to incorporate new findings.

To put it another way, if the market price moves from X to Y, then expect Z. However, if Z does not occur, the algorithm reevaluates the situation and eliminates that conclusion from the list of possibilities. For any trader who uses a robot to execute their trades, the outcome of Z would be a loss.

Today’s market is possibly more volatile than it has ever been. COVID wreaked havoc on airlines, tech firms, retail behemoths, movie theatres, and a slew of other industries, and even the best forex robots don’t have enough data to forecast tomorrow’s markets… yet. Although automated trading may still outperform a novice trader in 2020, it still has a lot to learn about the year ahead, and we at dailybluepips believe that these environmental and market shifts are only the beginning.

Trading tip for trading with robots:

Before you turn to trading robots, you should first learn what forex trading is all about. The Exness MT4 and MT5 platforms provide access to today’s most popular forex auto trader software. Robots can do all of the work for you, allowing you to sit back and monitor your trading results, but many traders pay attention to what the robots are doing. Following what a robot does can teach a trader a lot. It can teach you how to react to the markets in a very effective way. By keeping a close eye on the markets, you’ll be able to set more realistic parameters for your robot and stay on track with your personal objectives.

You have the option of limiting the assets that the forex robot examines. Sticking to major currencies provides a more stable trading environment, but it also means your winning and losing trade results will be less extreme. It’s impossible to say which currencies are the most advantageous for trading. Robots do not have a single asset that outperforms another. Start with the amount you’re willing to trade on a daily basis, rather than focusing on which assets to trade.

Setting the forex robot to make very small trades can help you learn a lot in a short amount of time. Setting a daily budget will help you avoid stress and will not interfere with your lifestyle while you are studying. Switch on the robot once you’ve determined how much you’re willing to invest, then keep an eye on the trades your forex robot is making. At first, try following just one trading robot. Using a demo account is probably the best way to get started with forex. It’s a risk-free way to see how the size of the investment relates to the robot’s profitability.

Before committing to a forex robot, dailybluepips recommends that you gain practical experience with trading before using one of the free forex robots as your primary trading strategy.

Follow the steps below to use a risk-free demo account to test your skills. You’ll have free access to some of the industry’s best forex ea robots. You’ll be able to open a real account and make real trades in no time thanks to flexible leverage and low deposits.

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