Tips To Pick The Right Forex Robot

The “brains” behind the robot should be a successful, experienced Forex trader – not a programmer. Yes, Forex robots require software programming knowledge to create, but the programming “language” used to create them (MQL4) is not all that difficult to pick up.

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Whenever I see a new ad campaign for a Forex robot that claims it was built by a reclusive team of computer geniuses, I tell anyone who asks to run in the other direction – because Forex is not about the code, it’s about the strategy.

You could tell the most brilliant computer programmer in the world to create a Forex robot, and they could probably whip up something that looked great in record time after reading a few books about the currency market – but I sure wouldn’t want to trust what they came up with to trade on my account.

And the dirty secret of the Forex software industry is that the vast majority of robot EA’s are created not by Forex traders themselves, but “outsourced” to cheap programmers overseas who in many cases don’t know the first thing about Forex.

So what do they do?

They head over to a Forex-trading forum, pick up a “strategy” or two, and try to patch together a piece of software that puts them into action.

But these “robots” are way too flimsy to trade with real money. So that’s rule number one: Always make sure any robot you trade with was put together by someone who knows their stuff about the Forex market, and not just by some hack programmer .

Make sure the robot has undergone extensive “strategy testing” (otherwise known as “back-testing”) under strict conditions to ensure that its fundamental trading “rules” are sound. You should also require solid evidence the robot has been tested on a “live” real-money account (not just a “demo”) to make certain it performs as well under real market conditions as the back-testing results suggest it should.

Any robot you trust with your Forex account should have a good “balance” of trades throughout the day – not so few that it misses profitable opportunities, and not so many that you only end up with a pile of tiny profits and a much deeper pit of account draining losses.

Many robots you find online use the popular (but deeply flawed) “scalper” strategy to make their trades – not because it works well, but because it aims to make the most trades possible every day, so it sounds good (after all, more trades sounds like “more profits”, right?)… and that inflated number of trades makes it

easier for marketers to sell.

On the other hand, there are robots that could be highly profitable because they operate on a good strategy, but they make so few trades that it would take you years to make any real money.

Last, but not least, make sure any robot you trade with doesn’t have any “hidden flaws” that make it unsuitable for use with your broker or trading goals. For example, many robots are not compatible with all brokers – just a handful (whichever ones happen to be giving the marketers a nice kick-back, I suspect) – be

sure to find out whether the software will work with your broker before making a purchase.

You should also check to make sure the robot is suitable for trading in all market conditions, not just one particularly “favorable” set of circumstances, and make sure to find out which currencies it is capable of trading (some will only trade one single currency pair, which may not be ideal for your trading goals).

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