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Dear Trader,

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Thanks to your generous support we are able to continue researching the Forex Trading market and accomplish our mission to provide you with accurate, reliable and real-time Forex trading results of the most popular Forex Robots, together with sharp analyzes.

Once again, Thank You!

Respectfully,

Uriel Katz
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Forex-Robots.com

One of the great things about forex robots is that they offer traders the opportunity to automatically hedge their trades. At the bare minimum, a forex robot that is truly proficient at hedging will protect the trader by initiating a short trade in the same pair that the robot has taken a long trade in. The truly successful forex robots let the losing trade get stopped for a minimal amount of pips lost and let the winning trade run to net the trader a handsome gain. Of course, this all seems so simple on the surface, but hedging is no longer a privilege available with forex brokers based in the United States.

Move Your Forex Robot To The U.K.?

Recently, anti-hedging legislation was passed in the U.S. and the unfortunate consequence of this government interference in the forex market is that forex robots operating on US brokerage accounts have had their hedging capabilities cut out from underneath them. The National Futures Association (NFA) is behind the move to eliminate the hedging capabilities of US brokers and the move may put US brokerage firms and traders (and their forex robots) at an acute disadvantage. While holding a long and a short position in the same pair appears to be an offsetting move, many traders and forex robots will hold both positions until a definitive trend has emerged.

So what’s the solution for restoring your forex robot’s hedging capabilities if you use a US forex broker? Fortunately, the answer is pretty clear: Switch to a UK-based brokerage. For example, traders using FXCM can make a seamless transition to the FXCM UK and set their forex robots loose on hedging tactics once again.

Know The Pitfalls Of Trading With An Offshore Broker

Unfortunately, for US investors, there are some pitfalls of moving your brokerage account offshore to restore your forex robot’s hedging capabilities. Traders moving their accounts offshore can become subject to state level regulation and if the account size is large enough, Commodities Futures Trading Commission regulation. One option for avoiding such pitfalls and keeping an account within the U.S. is to trade with an unregulated forex broker. Knowing that trades might opt for this course of action, it is surprising that the NFA would have moved to kill traders’ ability to hedge and impact the usefulness of forex robots. Of course, the NFA attempts to defend itself by saying that traders using sound trading principles won’t feel the effects of the new anti-hedging rule. That’s fine, but there is really no justification for limiting the use of forex robots, a product that many traders find useful in their attempt to generate pips.

The U.K. Is Waiting for Forex Robots Trading!

If you’re feeling the pinch of the anti-hedging rule, ask your broker if it has a UK branch that you can switch over to. At this point, this is the best and easiest way to get your forex robot working again on hedging strategies. Some forex robots have excellent hedging skills and it pays to maximize these benefits to the fullest.

It may seem like an odd question to ask given that most forex traders purchase forex robots for their automated trading capabilities. That’s one of the big hooks present on so many forex robot sales pages. “Set the (insert forex robot name here) on autopilot and watch as it delivers forex riches to you while you sleep.!” We’ve all seen stuff like that before and it’s a sales tactic the forex robot industry isn’t likely to eschew anytime soon.

Obviously, automated trading has its benefits. A lot of forex investors are in the game as a way making some side income and they don’t have the time to be full-time traders. Many are restricted by their day jobs and cannot spend time using their work computers to check on forex trades. A fully automated forex robot is the best bet for them. In addition, novice traders can certainly benefit from putting their forex robots on autopilot, especially if the robot is a good one. Nothing does more to boost a new trader’s confidence than to get off on the right foot by making some pips in his first few trades.

This all useful information to know, but it probably doesn’t give you a direct answer about what is the best way to operate your forex robot: On autopilot or in conjunction with your own trading ideas and instincts. Let’s take a deeper look at what strategy is best.

Is It Even Possible For A Robot To Work Not On Autopilot?

The short answer is “yes.” There are several forex robots on the market today that function kind of like forex signal services in that the trader must be present to not only see the trade the forex robot is recommending, but also to manually enter the trade himself. A lot of the forex robots that do this in MetaTrader 4 will give the trader the option of declining or taking the trade by using a box that pops up with the recommended trade inside of it. This is advantageous for multiple reasons. First, the trader can see how the forex robot works in a live environment without actually risking any money. Just keep a record of the trades the robot recommended that you didn’t take to test its proficiency.

Second, this way of testing a forex robot doesn’t involve the potentially skewed results that can occur in a demo account or through backtesting. Overall, this is probably a better avenue for more seasoned traders to explore because they will have a better sense of what trades to take and which ones to pass on than a rookie forex trader does.

Forex Robot in Autopilot means Auto Profits?

Some forex robots are in fact quite adept at generating pips in the autopilot setting. However, traders should make sure their forex robot automated trading fits their trading. If your forex robot puts you in 10 trades per day while you’d prefer three or four, tweak its settings. We favor the autopilot setting in forex robots for new traders or those investors that cannot commit to trading at least a couple of hours a day.

Alright, so you’ve graduated from demo trading and cursory market research and you’re ready to trade live. You’ve opted to go a with a forex broker that works on the MetaTrader platform, which most forex brokers currently do, and you’d like to find a forex robot to help you in your quest to make a lot of pips. Fortunately, this will be one of the easier things you do early in your trading career because most forex robots are compatible with the MetaTrader platform. If the developers behind a forex robot were foolish enough to create a product that wasn’t compatible with MetaTrader they would be eliminating a vast portion of their potential customer base because MetaTrader is so widely used by forex traders all over the world.

So popular and highly regarded is the MetaTrader platform that it makes it harder to find a forex robot that is NOT compatible with this platform than it is to find a robot that can be fully integrated into MetaTrader.

MetaTrader Forex Robots

MetaTrader itself comes with several forex robots that the trader can use and tinker with to find the best forex trading strategies. Most of these forex robots can be manipulated to fit a particular trading strategy and can be fully automated. In fact, many of the MetaTrader forex robots are a bit more conservative than their competitors, which can be a good thing in volatile market conditions to help traders avoid big losses. Just remember that MetaTrader’s forex robots make results available to you that are derived from backtesting.

Technical Forex Stuff You Need To Know

There are few steps you need to know to properly install your forex robot in MetaTrader. First, find the .exe4 file that you got when purchasing your forex robot and save it to your desktop. Next, go to the “Experts” folder in MetaTrader and drag and drop this menu over to your robot icon on the desktop. Close down all other windows and open MetaTrader and you’ll see your robot listed in the “Experts” menu.

Be aware that the new version of MetaTrader is about to be released and features a lot of nifty upgrades over the previous generation. MetaTrader 5 is the new product and users of MetaTrader 4 cannot simply upgrade to the new version because the new product is a completely new platform. This means that any of the MetaTrader robots you used in the old version of the product cannot be carried over to the new version.

MetaTrader And Your Forex Robot: A Winning Combination?

Given the intuitiveness and ease of MetaTrader and the automatic trading capabilities of so many forex robots, we like the pairing of these two trading vehicles in most circumstances. That said, it is advisable for traders to work MetaTrader prior to purchasing a forex robot just so they know what to look for when shopping for a robot.

Remember, you want your forex robot and MetaTrader to complement each other, not be at odds with one another.

In previous articles, we have briefly discussed the advantages of auditioning a forex robot in a live trading account over a demo or simulated account or relying on backtested results. Our feeling that traders can get the best sense of a how a forex robot is going to perform through a live account rather than in a simulated environment is not meant to be a slight on demo trading. A demo account is definitely an advisable option for a new trader to hone his skills and discover areas of his trading that need some fine-tuning. We’re certainly fans of the fact that most reputable forex brokers offer free demo accounts and that traders can participate in this trading arena without risking real capital.

That said, our experience has been that those egregious claims that you’ve probably seen on the sales pages of a lot of forex robots come from trades that are either taken in demo accounts or in backtests. The unfortunate aspect of this that you, the user of the forex robot, doesn’t get a true sense for how that forex robot is going to perform when it is trading in a live account. In backtesting, the forex robot has the benefit of hindsight. The programmers can tinker with the robot’s settings until they find a strategy that works. This isn’t all that hard to accomplish when you already know how the market performed.

Likewise, in demo accounts, a forex robot may trade more frequently or take more dollar risk than you would want it to take with live capital. This can boost the forex robot’s performance results, but then you’ll be in for an unpleasant surprise when you turn that forex robot loose in your live account.

Other Pitfalls Of Demo Forex Trading

Most brokerage firms that offer demo accounts give you a large amount of “play money.” FXCM usually gives traders access to $50,000 in faux cash and there are some other brokers that give you as much as $100,000. That’s all well and fine, but how many traders are going to open their first forex account with $50,000-$100,000? Not many.
That may seem like it’s not a relevant point, but trust us, it is. If you run a forex robot in a demo account with $50,000 while knowing that you’re only going to put $5,000 into your live account the forex robot is going to produce different results. This is just one more reason why we advocate using forex robots solely in live accounts.
Perhaps the best way of viewing demo accounts is as a learning environment. A demo account is the next step for a novice trader that has perhaps read a couple of forex trading books and done some tertiary market research. A forex robot is a few more steps beyond a demo account and the two should not be mixed. In order to keep the unpleasant surprises to a minimum, let your forex robot trade with the real thing and nothing less.

So you’ve been shopping for a forex robot and visited the seemingly endless array of Web sites and sales pages where the developers behind forex robots extoll the virtues of their product. Hey, it’s alright that they do this. After all, these guys are in business to make money and that only happens by selling as many forex robots as they possibly can. If you’ve been to just one forex robot sales page, you’ve probably noticed either a video of the forex robot’s trading results or a screen shot of the forex robot’s profit and loss record.

And you’ve probably noticed some pretty egregious claims regarding the forex robot’s ability to make you a ton of pips. Does stuff like “96% accurate” and “eight of every 10 trades is a winner” sound familiar? The answer is likely yes. But what is the source of these claims? More often than these results are the product of a forex robot running either on a demo account or in backtests and that doesn’t do you, the trader, a lot of good.

Live Results Are The Only Thing That Matters

Even if a forex robot brags about superior trading results, remember that the developers are touting a performance that took place well before you purchased their forex robot. Market conditions could have changed. The developers may have programmed the forex robot to take on more risk since it was running in a demo account or the forex robot could have been backtesting a trading strategy.

You buy the forex robot and set it loose in a demo account, using the same settings recommended by the developers and love the results. You can’t wait to set the robot loose in a live account.
The day comes and you set the forex robot in a live account and you watch it drain your funds. Unfortunately, you’ve learned an expensive lesson. Let’s impart that lesson on you right now free of charge: The only way to know the true virtues of any forex robot is to test it in a live trading account.

Where Do You Go From Here?

Now you know that demo and backtest results are not the best indicators of a forex robot’s ability to generate pips, but what’s your next move? A good idea might be to run the forex robot you’ve purchased in a mini or micro account, using smaller position sizes than you do in your standard account. This experiment has a two-fold benefit. It auditions your forex robot in a live trading environment, but gives you a less stressful way of trying the robot out because the losses in a mini account are obviously much smaller than in a standard forex account.

If you’re looking for perfection in the forex robot marketplace, you’re not going to find it. Every forex robot has its strengths and weaknesses. Just be sure to find one that has more of the former and less of the latter. And remember to run it in a live account. That’s best way to figure out if you’ve got the right forex robot.

No one gets into forex trading just for fun. Yes, trading can be fun at times, but it’s a lot like sports: It’s more fun when you’re winning. And the top reason that any gets involved in trading any investment vehicle is to make money. Sure, trading can be extension of one’s love of the markets, but no one loves losing money. So where do forex robots fit into your personal profit scenario? For the most part, forex robots can help traders, particularly novice traders, make pips in the forex market.

Forex robots are great for new traders just getting their feet wet in the market or for investors that simply cannot devote the time to trading several hours a day. And products that are comparable to forex robots don’t really exist in other asset classes. There are a few stock trading robots, but that industry has more crude, less reliable products than the fores world does. Many stock robots only trade penny stocks and that’s like swimming with the sharks. The right forex robot can help traders level the playing field when competing against the sophisticated systems used by banks and hedge funds. No stock robot does that.
 

Do Forex Robots Guarantee Profits?

Quite simply, the smart forex robot developers will not promise you pips. In the U.S. to make such claims is illegal and it’s probably forbidden in other countries as well. What the folks behind forex robots do is make claims about the accuracy of their product, going so far as to say, in some instances, that their robot wins on 96% of its trades.
Let’s be clear. Most forex robots are fine products, but there is no holly grail among them to stuff your account with so many pips that you’ll never need to work another day in your life. It’s certainly possible to supplement your income with forex trading and some traders make it far enough that trading is their only source of income. That’s the ultimate goal, but don’t soley rely on a forex robot to get you there. Forex robots should be just one part of your overall forex trading strategy. And remember the only way to discover a forex robot’s virtues and problems is by testing it in a live account.

Know What You’re Getting Into With Forex Robots

There are many factors for potential buyers of forex robots to consider. Trading style, pairs traded, amount of trades, price, customer service, ease of use and other factors needed to be evaluated by the trader. While all that may sound daunting, remember the whole reason to consider a forex robot is to boost your bottom line. The point is forex trading can be tricky, but your forex robot should not trick you. A forex robot should be a reliable, easy-to-use part of your pip generating arsenal. Forex robots are not mysterious beast, but they can put you on your way to becoming a profitable forex trader and that’s what you got into the game for, isn’t it?

Believe it or not, shopping for a forex robot can be a lot like shopping for a new car. Of course, the forex robot is far less expensive, at least it should be, but just as with a car, there are lots of questions to be answered with a forex robot and you’ll certainly want to take it for a test drive. And let’s take this opportunity to remind you that you would never test drive a car in a parking lot or on an empty test track. You take a car for a test drive on a real street occupied by other vehicles. This is analogous to only testing a forex robot in a live account. We know we’ve mentioned this a million times before, but it is an important point to remember.

Don’t worry. The Internet makes comparing the offerings of the forex robot market easy. There are dozens of sites offering trading results, pricing data, product reviews and other chatter about forex robots. The growth in the forex robot market has actually benefited the consumer in that information is more widely available about forex robots today than it has been at any point in the past.

Be A Savvy Forex Robot Shopper

The best way to shop for a forex robot is to arm yourself with as much information as possible. A lot of the forex robots on the market today are similar to a competing product. Don’t be impressed by audacious performance claims or videos of the robot action. As we’ve told you in previous articles, those results are probably the byproduct of backtesting or simulated trading.

At the same point, just because one review maligns a forex robot, don’t take that to mean the product is inherently bad. For better or worse, you’re likely to find several conflicting reports on various forex robots where one trade will swear by that particular robot and another will call it a piece of junk. One thing that you should know by now about forex robots is that they will not produce the same results for each trader. The goal is to sell as many forex robot as possible and to do that the developers just need traders to tell their friends that a certain robot is not profitable, not how much the robot is making.

Things To Look For in a Forex Robot

There are few things to put on your checklist when shopping for a forex robot. First, and this another point we’ve lamented in the past, make sure you’re comfortable with that forex robot’s strategy and trading style. Second, and no less important, make sure it’s easy to use and install. Computers can be frustrating for most of us and there is no point in compounding that frustration by purchasing a forex robot that confuses you. Third, make sure your forex robot comes with a money-back guarantee. Many of the robots on the market day come with 30 or 60-day money-back promises. Finally, ensure that seller gives you access to good customer service. It is inevitable that you’ll have questions regarding your forex robot and a responsive customer service team is an invaluable tool.

As the popularity of trading foreign currency has surged in recent years, so has the proliferation of forex robots available to forex traders. Usually the intent of a forex robot is to either signal winning trades to the trade or automatically enter and exit trades while the trade is away from his computer. Yes, that’s right. Many forex robots can be set on autopilot so the trade can potentially make money while he’s at his day job, shopping for groceries or even while he’s asleep.

While forex robots seem like a nifty idea, traders should be sure to fully investigate the offerings and performance results of the various forex robots on the market before committing money to them and setting them loose on a live trading account. Traders should do their research and read reviews of various forex robots to learn about the advantages and pitfalls of each product.

Forex Robots Performance

Obviously, the most important thing to look for when considering a forex robot is consistent performance over the long term. Some forex robots are only capable of generating winning trades under certain market conditions and once the market condition changes, the robot ceases to be useful. The goal is to find a forex robot that has been profitable under a variety of market conditions for an extended period of time. Remember, you don’t want a one-hit wonder in your forex robot.

Second, you should expect that your forex robot is easy to use and compatible with your broker’s trading platform. There is no point in using a forex robot if you don’t understand how it works. Most forex robots give traders fairly detailed descriptions of how they work and initiate trades on their sales pages. In addition, if you use a MetaTrader 4 broker, most forex robots are compatible with that platform, but make sure beyond a shadow of a doubt that the robot you’re looking at does work with MetaTrader 4. Just look at the sales page for this data.

Finally, traders should expect that their forex robot is proficient with multiple major currency pairs. Many forex robots specialize in one pair and this can be quite limiting for the trader because what if there is no strong trend in that pair and it is trading sideways for an extended period of time? You need a forex robot that is successful with multiple currency pairs to net the most pips. It’s as simple as that.

In previous articles, we have briefly mentioned forex robots that focus on a single currency pair and those forex robots that trade multiple pairs, but consider this a more thorough examination of the advantages and pitfalls that each forex robot may present. To start, it is worth noting that although a forex robot may focus on a single pair, you can probably alter its settings to focus on another pair or group of pairs. If after altering your forex robot’s settings away from its pair of choice you notice a sustained losing streak or big drawdowns, switch the settings back or find a new forex robot?

Better To Have Options Or Predictability?

We’re not really going to extoll the virtues of a forex robot that trades just one forex pair while deriding the forex robots that trade multiple, nor will we single the latter’s praises while bashing one-pair forex robots. The idea here is give traders a sense of what to expect from each type of forex robot.

With a single-pair forex robot, more often than not, the pair is going to be the EUR/USD, though we have come across some single-pair forex robots that focus on the GBP/USD and the USD/CHF. The EUR/USD pair is a typical one to focus on simply because it is the most traded pair in the forex market and it has very defined ranges during each trading session. For example, during the New York session, the range for the EUR/USD pair is about 30-40 pips and this is the case on most days. What the single-pair robot is offering here is the ability to exploit what it perceives to be defined ranges and predictable trends.

Does this work? Yes, if the forex robot was programmed to take a small amount of trades per day or in a week and if it was programmed with ample trading data, it should be able to exploit a single pair’s trends with consistency. However, there are downfalls, the primary one being not even the most volatile pairs moves all day during all three trading sessions, so your forex robot could be left out to dry in a choppy, sideways market.
Now this may lead you to think that a forex robot that trades multiple pairs is better than a forex robot that does not. While it’s definitely nice to have options, especially when one pair is in a lull, there is no empirical evidence to suggest that multi-pair forex robots outperform their single-pair brethren. In fact, the risk here is that a forex robot that trades multiple pairs, particularly if its focus is intraday trading, may over trade and expose the trader to too much in the risk in the process.

Now you know what we mean when we say there is no holy grail among forex robots.

Who’s The Winner?

It’s hard to say if one genre of forex robots is superior over the other solely on the basis of number of forex pairs traded. If you’re the kind of trader that likes having a menu of options, find a forex robot that trades multiple pairs. If you’re more comfortable with an intense focus on one pair, buy a forex robot that only trades one pair. It’s that simple.