Forex Robots take emotion out of trading

One of the revolutions of the last ten years in the world of forex trading is the advent of automated forex trading. Automated forex trading involves trading forex with the use of software known as Expert Advisors (or forex robots) which place automatic entries and exits on trades if the parameters on which they were programmed are met. Simply put, the software trades for you.

The advantage of automated forex trading is that a trader avoids the dreariness of having to sit in front of his computer staring at charts all day long in order to take trades - quoted from Prof FX. The EA is programmed according to the chosen forex trading strategy, and when the robot is attached to the chart and identifies a trade setup according to the pre-programmed strategy, it automatically opens a position on the currency pair it is attached to.

Now while this may sound like the way to go for many forex traders, there are some drawbacks associated with the use of automated forex trading. The forex market is a very fluid and dynamic market that is heavily influenced by economic news events coming out of the countries whose currencies dominate the forex market. No expert advisor can be programmed to trade news. Market moving news can occur suddenly and without warning. A seemingly good trade that is in profit can easily be reversed by a surprise economic news announcement. News items from the US, China and the Eurozone are notorious for this.

A classical example of this scenario is the hammering the Euro took in late November/early December as a result of the debt situation in Ireland. A long position placed by an EA on the Euro would surely have been stopped out in this scenario.

In addition, many forex robots out there on the Internet simply do not give good results. Many are not programmed to factor in good money management in trades. Money management is something that every trader must apply if a trading account is to be preserved.

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Another drawback is that many expert advisors need to be continually updated to adjust to the evolving nature of the forex market.

Now how can you get automated trading software for use? There are two options:

1)Buy any one of the numerous forex robots out there.

2)Get a programmer to encode a profitable strategy into an expert advisor for you.

From my experience, I have found a number of robots that trade well, but many, many more which do not. That is why here at eForexSystemReviews.com we trial as many forex systems as we can.