Are You Ready to Hand Your Trading Over to a Forex Robot?
What is a trading robot or forex robot?
Forex robot or fx bot or forex bot is a trading script that automates the trading decisions on the currency trading platforms. The Forex Robot is a computer-based program and it is based on the set of Forex trading rules. It will help you to buy or sell the currency pair at any point in time.
In Metatrader forex robots we call Expert Advisors. They give you a signal in order to place trades and it can also manage the trade automatically. In this process, the trader does not need to take care of the entire trading process manually. Forex Autobot can trade alone or can be semi-automated – where trader can manage positions and robots only enter into a position.
Do Trading Robots Really Work? Of course, they do, but robots are not “holy grail” and they can not have high performance as you expect. In science research papers, the best robots can achieve 9%-12% gain per year with drawdown less than 8%.
If you think that there is link to the forex robot which can double your account – you will make a mistake. I believe in the quantitative analysis which allows traders to remove emotion from the investing process and focuses on statistics or probabilities over gut feelings. In my opinion using data mining, statistics, testing, creating models – is only way to create a good forex robot.
In my prop company quants creates a lot of “forex robots”, automated trading system.
What is an automated trading system?
This trading system is ruled by the automated process. This is a program that allows the traders in order to set the rules for entering and exiting trades. In this system, the computer has to perform all the trading system and you will just have to sit in front of the monitor in order to see the ups and downs.
There are so many people who do not have exact and enough knowledge about the trading system. They get involved and do not know how to handle this. So, for them, the automated trading system is the best option. This trading system is very much accessible and you will just need a computer with a proper internet connection. You should know one fact that you do not need to do a big investment in order to get started the whole procedure.
It is one kind of software and it can provide the Forex traders multiple amounts of trading services. This software indicates and guides their clients about a suitable time for buying and selling. They can also guide you throughout the process. You do not need to feel lonely in the vast area of the trading market. You can accustom yourself with the whole process.
They will show you the path and results after researching various trading strategies. They always provide the source codes and give you proper guidance as well. They also follow the unique mathematical algorithm.
Now when we know the theory, how quants create excellent robots? Our quants or quantitative researchers, read science research papers, test models, exchange knowledge from traders, test various systems and make results.
Can I show you some trading systems and a forex robot that actually works?
Yes, of course.
For example please read these papers:
The best performance forex robots are robots based on Time series momentum where traders can trade in the same time bonds,equities, commodities, currencies and hedge positions and achive better performance up to 12% gain per year.
Important thing: Results of all these robots are realistic because they tested on large datasets, on the unseen datasets and not overfitted. Robots on the internet (a lot of trading expert advisors that do not have proven scientistic testing on unseen data) which a lot of programmers sell show indicative results and false unrealistic results. For example if we have 3 bullish years for some stock or currency pair and we create robot which will more buy than sell than when we test that robot it will show great performance. In live trading, it will be very bad.
Forex trading has various trading styles and strategies as well. in the market of Forex, there are so many experts and efficient traders who can guide you properly and each and every trader has different ways of strategies and working structures. The overall Forex feature is divided into two parts- one who wants to do trading through a manual trading system and others who want to do trading by utilizing automated trading system. Let focus on automated trading.
Now you generally have these questions- what is an automated trading system? Is this really profitable? What are the benefits and disadvantages of this trading system? Is this procedure totally safe or not? So, let’s proceed towards this article and get all the answers to these important questions.
How does the automated process work?
Step 1: the Trading idea
Either using experience or some basic idea or research paper, the quantitative traders test various ideas.
Step 2: Testing, backtesting or machine learning
In this step we try to optimize model, ad new rules, change rules, improve performance.
Step 3: Coding the final version of the robot
In this step, programmers will write rules in python or mql4 or mql5 or any programming language and finish the robot.
It is not important whether you are an experienced or a beginner and novice in this platform. The automated trading system will guide you throughout the process. They can give you expert advice and take real trading decisions on behalf of the traders.
There are the best trading programs that are computer-based. These programs are specially designed to research and analyze the overall market of trading. This particular software helps you to understand the key trading signals. This software also points out the fluctuation of currencies and transactions as well.
This software helps you to find profitable currency pairs. This software helps you to research well before placing trades on them. If you are planning to input your own strategy of trading then you need to strictly monitor the overall market.
The advantage and disadvantage of forex robot:
Forex Robot is a Forex trading software. It can automate trading decisions. It is very much modern financial strategically system. There are so many companies making and selling Forex Robots. But you will have to follow the strict rules and doing proper market research in order to avoid any kinds of scams and all. This is the only disadvantage of Forex Robots.
Forex Robots are developed and programmed by different and experienced programmers. They are responsible for coding different and various strategies into the fully automated system in order to open, close and manage the position in the Forex trading market. The Forex Robot will execute the trade on the basis of the signals provided by traders. This tool will help the trader to avoid panic attacks and making the perfect trading solutions as well.
The efficient trading robot uses its intelligence to manage the whole process. You can get the successful robots and their advanced strategies. These robots can manage system smartly. They will manage the risk successfully.
Now you have got a clear idea about what is an automated system and how does it work? The robots carefully and strategically execute the trading systems. You can get one time real data from the robots. So, from now, you can invest in the Forex market smartly and strategically and get enough profits from there.
This is the first article on this subject.
In the next articles, I will give you more details about robots, quantitative research, and case study ideas.