Currency trading is a very lucrative form of investment, with possibilities of quick returns. It is also a high risk venture full of hidden pitfalls that can cripple you financially.

For a long time, to invest in forex trading meant you had to do your technical analysis, follow the news constantly, do your fundamental analysis, follow all kinds of indicators, and sit at your computer all day watching your price charts like a hawk.

Many forex traders know this is too much hard work and will end up in burnout, which will cloud your judgment instead of enhancing it.

With this realization, many currency trading online brokers (market makers) have tried many options to make trading easier for their clients, with reduced risks and higher chances of profitability.

From this need to ease the burden on traders yet increase their profitability came the idea of automated trading or the use of expert advisors (EA’s) to trade.

What Is Automated Forex Trading?

Manual forex trading involves the trader setting up a set of rules or a strategy then following those rules to make trade decisions.

This usually involves waiting at your computer to follow through on your decisions when the criteria for entering/exiting a trade are eventually fulfilled.

Automated trading takes away the waiting and anxiety. Automated trading is the use of a computer program that has been coded with your trading strategy or set of rules to automatically make trade decisions for the trader.

The computer program uses the trader’s set rules to determine trade entry and exit points on any chosen currency pair.

What Are Forex Robots or Expert advisors (EA’s)?

A forex trading robot or an expert advisor is the computer program used in automated currency trading online.

It is a piece of sophisticated software based on highly complex mathematical algorithms designed to follow trade signals and the set rules the trader inputs into it to determine whether and when to buy or sell a currency.

Most of the popular currency trading robots used online today are built to perform on the MetaTrader platform. On the MetaTrader platform, such forex robots are commonly referred to as expert advisers.

The functions of forex robots range from entering trades, managing trades, exiting trades, producing signals for the trader, and making automatic trades 24 hours a day.

Setting up Forex Robots

If you are keen on trying out automated currency trading online, you can purchase one of the top-rated forex trading robots that have earned great reviews and profits for their clients.

Your first requirement is to have a fast computer with reliable internet connectivity. You should then purchase some highly reliable software capable of smoothly trading on your live forex trading account.

Find out from your broker whether the software is compatible with their platform before purchasing it. This is because the forex robots directly communicate with the market maker’s server to exchange data in real time.

Once you have the software, follow every step contained in your user manual to set up your strategy and code in your orders to avoid unforeseen losses. Remember, as good as these robots sound, they do not all perform profitably.

A lot of times, losses are mainly due to traders not going through a complete and thorough setup process. However, sometimes the losses are a direct result of poor software or scam market makers.

Using forex robots for automated forex trading has many advantages as well as disadvantages.

Advantages of Automated Trading

One of the most obvious advantages of using expert advisors is they give the trader the ability to profitably and effortlessly trade 24 hours a day.

Once the trader goes through the setup process and told the robot what trade actions to perform and under what conditions, then the robot will perform the buy and sell functions in a timely fashion from then onwards.

As you probably well know, the number one cause of failure for forex traders is succumbing to emotions. One of the best advantages of automated trading is that the forex robots take away the emotions out of the trading. A robot will not fear to make a trade and neither will it become greedy.

How many of you are good in math? Well, my grocery list still gives me problems and so do many other traders.

Forex trading robots remove the guesswork and perform all those complex calculations you always dread. Fx market robots also analyzes large data volumes that even 100 mathematical geniuses would not manage at a time.

Human is to error, and as forex traders we make many errors day after day trading manually on the fx exchange market. Forex trading robots do not make errors, they simply follow the set strategy inputted into them by traders.

Disadvantages of Automated Trading

In forex trading, there is nothing like an infallible system. Even the best robots do make losses. It is only the regularity of losses that makes one robot better or worse than another.

You can perform due diligence to minimize the chances of getting a lousy robot but there are no guarantees. With so many developers creating robots, not even going through online reviews will give you the best robot.

Today’s technology is in many ways a trader’s friend. But it can be a traders enemy and cause for his/her downfall too.

If your software is not up to date, it may fail. If your computer or connectivity is slow, you are likely to fail. If your various software are not compatible with your fx trading platform, you are doomed to fail.

Apart from software, if you are not technically-savvy, you may end up making some wrong setups or omitting some steps in the setup process. This may not be immediately evident until the time when your whole account has been wiped out.

The forex market is the biggest market in the world. And like all other markets, it has its fair share of scammers.

The nature of the market, being not so tightly regulated, means scammers have a free hand to compete with genuine traders. Unfortunately, it is not so easy to know the difference.

Their websites are just as good and professional as those of genuine market makers and software designers. They will offer you free trials and money back guarantees just like any genuine broker. You will not know they are scammers until you and a few hundred or even thousand other traders try claiming your money back.

Before you open an account with any broker, weight it against these guidelines: https://www.forextradingbig.com/how-to-choose-the-best-forex-broker/

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