Choosing best forex robot among many expert advisors in the global Internet is not as simple as it sounds. It requires a lot of knowledge and analyze. There are some basic questions that all traders should answer for themselves before buying forex robots. We will try to emphasize some of the most important of these questions.
Forex robots important questions
Nowadays, choosing forex robots needs a lot of attention if the trader wants to become successful in the forex market. In order to get expert advisor with successful performance the trader must answer few very important questions. I will count some of them below and will try to give more information and answer all of them:
- Do you plan to trade for short/long term trading?
- Are you looking for expert advisor which is grid/martingale forex robot?
- Does the developer of the robot show REAL/LIVE trading account on third part system such as Myfxbook or FXblue?
- Does the account has long history?
- Is it compatible with all the brokers and account types
- Does the EA works on NFA regulated brokers?
- Does it work with brokers who offer high spreads?
- Will it show stable results on brokers with bad conditions, such as: spreads, slippage, price quotes?
- Is it developed for big accounts or for accounts with low account balance?
- Does the EA shows good results after backtests for long period of time?
- Does it fully automated or the trader must manipulate it?
Do you plan to trade for short/long period of time?
Before to choose best forex robots it is important to clearly decide what is your trading style - short or long term trading.
Short-term trading basicly means that the trading strategy in the futures/stock market where the time duration is between few days to few weeks. For example, day trading is short-term trading style where the trader's all positions opened on that day are closed the same day.
This type of trading is risky and unpredictable due to volatile of the market. Since the short-term trading is risky, often the small invstors are advised to limit short term trading and choose long term trading.
Long-term trading refers to time period from few weeks to years. But there is no absolute rules how long you have to keep the positions.
Are you looking for expert advisor which is grid/martingale forex robot?
Grid trading is a type of trading strategy that is really dangeuour especially for the traders without any experience. So, before starting grid trading it is very important to understand what is grid trading strategy.
Shortly, grid trading is a strategy which open trades in pips interval, for example in every 10 pips it will open consequent trades in trend direction. Of course there are other grid trading strategies such as hedgin grid systems and so on. The important thing about grid trading is that there is no stop loss (this is important). Having no stop loss may blow up your account if you do not know what you are doing and how to do it.
Another trading strategy that you can choose from is martingale trading strategy. This martingale trading strategy is based on mathematical calcualation. The main idea behind martingale strategy is to double the losing trading lots size previously. This means if you open a trade with 1 lots size and it reaches the stop loss then you have to open double of the size of this losing trade, which should be 2 lots, and if it hits again the loss you have to double the last losing trade and open new position which is 4 lots size and this continues like that until you reach the drawdown limit you have set or you recovery the losses. The formula is simple 2n = 2(n-1) + 1.
Keep in mind that Martingale trading strategy is for accounts with high balance.
Does the developer of the robot show REAL/LIVE trading account on third part system such as Myfxbook or FXblue?
Another important taks as a trader you have to check if the developer of the forex robot has shared REAL trading account on third part system such as Myfxbook or FXblue. Do not underestimate this question because it may save you a lot of headache in the future.
Does the account has long history?
The trading account that is shared on Myfxbook / FXblue must be verified and cheked if it has long history. Many developers share accounts with 2 or 3 months trading history. I personaly do not take into consideration such accounts, even if it is real or demo, no matter. As for long history accounts with fully verification byt the third part system.
Is it compatible with all the forex brokers and account types?
Having forex robot which works under every forex brokers and account types is helpful, otherwise you may be stick to couple of brokers which may decrease your chances to success. So, be sure that the forex robots you purchase are compatible with all the brokers and account types.
Does the EA works on NFA regulated brokers?
Additionally, to the compatiblity of the forex brokers and account types, if you live in a country where it is prohibited hedging you may need forex expert advisor which works on NFA regulated brokers(FIFO). This is another questions that you have to asnwer before to buy expert advisor.
Does it work with brokers who offer high spreads?
There are many brokers offer different type of acocunts, which have high spreads. They also offer accounts with tigh spreads but mostly this will require commissions or other type of restrictions. So, be sure to check this point out. Choosing forex robots, which work on high spread brokers is good idea even though a lot of expert advisors do not show satisfying results on such accounts. But it is nice to look for such EA if you really want to escape commissions, fees or other type of restrictions.
Will it show stable results on brokers with bad conditions, such as: spreads, slippage, price quotes?
A lot of forex robots work perfect in backtests, in perfect and user-defined conditions but when it is matter of real live(REAL trading accounts) the things are not as good as expected and there are appear factors such as spreads, in most cases, slippage, price quotes and others. It is to have the time and knowledge to test the forex robots before switching to LIVE accounts. This is, I think, the most important question.
Is it developed for big accounts or for accounts with low account balance?
There are good expert advisors who works perfec in big accounts but they do not show the same performance in accounts with low account balance. If we take into consideration that many user start with low account balance it is essential to find out if the choosen forex robot will satisfied your needs and show stable perforamnce on small accounts.
Does the EA shows good results after backtests for long period of time?
Some traders say that the backtesting is nothing but losing a time, I personally cannot agree with them, unfortunately. Even if the backtesting results can be manipulated, it is useful to do backtesting. While doing backtests try to do it for long period of time, for example more than 10 years, the last 10 years or more. This way you may see the results and if the robot adequately survive during bad forex market conditions.
Does it fully automated or the trader must manipulate it?
Some traders prefer to take manual actions but mostly the traders does not want to manipulate the robot trades and leave it work instead of you. On the other hand, choosing expert advisor which requires manual interrection will band you to check very often the market in order not to miss the right time to open/close or do anthing addition. For that reason, choose expert advisor which is fully automated system is essential up to you point, so pay attention for this matter.
Choosing best forex robots sounds really challenging and interesging. Before to decide try to find out as much information as you can in order to escape future regrets and losing of money. Answer to all of the questions that I counted above. As a conclussion I want to add that the most important question when choosing forex robots is to find EA which works good under and market conditions if we take into consideration the factors: spread, slippage, price quotes.
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