With the internet enabling increasing numbers of people to chance their luck on the foreign exchange markets, any software that helps in predicting the highest gains is to be welcomed. One of the latest ideas to tempt investors s the use of Forex ‘robots’. But are they really such a good idea or could they lead to greater losses?
What is a Forex robot?
The Forex robot is becoming a popular method of allowing people to trade automatically for 24 hours a day without having to constantly monitor the markets. Although the name conjures up the image of intelligent hardware, the robot is actually a software program designed to analyse the markets and trade automatically on your behalf.
A Forex robot can be managed by a broker, advisor, or can even be bought and customised for personal use, allowing you to set your own parameters for buying and selling currencies on the foreign exchange markets.
Do all Forex robots work in the same way?
This is a definite ‘No’! Never has the term ‘Caveat emptor’ (buyer beware) been more appropriate. Any software is only as good as the programmer and it would be a mistake to place your trust entirely in the workings of a computer program.
The mistake most new traders make is to rely on the workings of a Forex robot to make their decisions. Whilst there are certainly some top-notch programs out there which will help to maximise gains, there are probably more ill-conceived programs developed by companies and individuals hoping to make a quick buck.
Beginners to this type of trading would be well advised to try out the Metatrader platform which is favoured by a number of different brokers who can adjust the program to suit your chosen parameters and advise you accordingly.
There is absolutely no substitute for studying and learning about foreign exchange markets, even if you plan to make use of a Forex robot. That way you can make an informed decision and intervene if the program is not performing to your liking. As with any form of trading it is probably best to run any robot program on a demo account initially to ensure that it is performing as you would wish.
Beware of advertising promising you huge returns many advertisers are more than happy to take your cash and then disappear almost overnight, leaving you with potential financial losses and absolutely no comeback.
However, for those prepared to spend time studying the various robots and monitoring their performance over a period of weeks in order to get a feel for how they work, there are considerable gains to be made. As with most financial issues, there is no quick fix and no easy route to riches, but with time and careful study it is possible to make good returns on your investments using a Forex robot.