Forex Trading Robots: How Do They Work?
Forex trading robots make multitasking possible by processing multiple conditions like order entries/exits and entering stop loss orders automatically. These robots are able to process forex trading information way more quickly than the human mind and make the trading process simpler, automated and more efficient. In our article, we will understand what forex trading robots are and how they work.
What are forex trading robots?
Forex trading robots automate forex trading orders with the help of customized algorithms. They analyse the forex market and perform various trading actions like opening/closing orders, managing trades and monitoring multiple currency pairs at a single time. It monitors the market in real-time and considers each price change while performing trading activities to provide you with suitable trading activities. You can use the trading robots to identify the ideal opening or closing price elves to place the order yourself, as the forex robot is responsible for sending you trading signals after analysing the market.
Types of forex trading robots
Expert Advisors (EA) are automated programs that help traders monitor and trade the forex market. It uses algorithms to find trading opportunities and provides traders with the ideal entry and exit price levels. EAs use the trading parameters a trader sets to open positions that align with the trader’s trading objectives and style.
Scalping trading robots are designed and automated to scalp the forex market and make small profits from small price fluctuations. These trading robots automatically close and open multiple trading positions in a single trading day. Each trade remains open only for a few minutes or seconds. The trading robots also fix the right stop loss and take profit levels for each trading order, making it easier for you to manage multiple trading positions simultaneously and automatically.
Arbitration forex trading robots are automated to take advantage of the currency pair’s pricing inefficiencies. When a currency pair is priced differently on different forex brokers, the arbitrage trading robot buys the currency pair on the cheaper platform and sells it on the expensive platform automatically to make profits from the difference.
News Trading Bots
News trading robots are based on a software that uses economic news releases to trade automatically. They have a built-in news calendar which helps the trading robot generate trading signals around and on an important economic news release. It tracks upcoming news releases and detects market behaviour before the release to close/open trades based on the news impact.
You can develop your trading robots yourself with MQL4/5 scripts as the building blocks of the trading robot. You can then use these on the MT4 and MT5 platforms.
Advantages of using forex trading robots
- Trading robots generate trading signals that are not biased by emotions and are based on only practical facts.
- When all trading processes are automated, you save a lot of time and can focus on your core job instead of only managing your forex account.
- Trading robots are up and running for 24 hours, which helps you capitalise on the forex market, which is open 24 hours a day for all five days of a week.
- Each trading robot can be tweaked as per an individual trader’s trading goals, objectives and trading styles with the help of setting up custom parameters.
- Forex trading bots process large data sizes within seconds and are able to make split-second decisions that are not under human capacity.
How does a forex trading robot work?
Forex trading bots can either automatically perform an end-to-end trading process or generate an individual signal based on the programmed criteria. They can help you in trading – either fully or partially. If you have no time to review the trading signals, you can leave the entire process over to the robots. But if you have some time to review the trading signals, you can program a robot to only identify potential successful signals. All forex trading robots can be used with MetaTrader (MT4 and MT5). They are programmed with the help of the MQL5 or 5 scripting language. Once you open an online forex trading account with a forex broker that supports MetaTrader, you can install the trading robots (Expert Advisors) to generate automatic signals. Here is how forex trading works in 3 simple steps -
- Source the forex trading robots from the developer’s website or a trading source that MetaQuotes (MetaTrader’s developer) maintains.
- Go through the track record of the trading robot to see the probability of success their trading signals have given in the past.
- After setting the right trading parameters, you can then purchase the trading robot to apply to your trading platform.
Trading parameters mean that you include important information like risk tolerance level, profit goals, risk-reward ratio and more that affects the robot’s functioning. The trading robot trades on behalf of you based on these parameters so that it is able to trade as per your trading objectives. Parameters can be updated when your trading preferences and expectations from the market change.
Automate your trade with multiple trading robots today
Trading robots are super-efficient and provide you with the ideal trading signals. These trading signals help you place successful trading orders within seconds without any external effort. Start trading with Blueberry Markets to add these trading robots to your trading strategy and automate the entire process in one click. Sign up for a live trading account or try a risk-free demo account.
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