The world is certainly going more digital and technological with the growth of artificial intelligence (AI), robots, and so on.
You must be excited by the thrilling features of Siri, Alexa, OpenAI ChatGPT, and so on. The Forex trading bot is another like it players in the financial market have to know about.
In this article, we’ll learn about the Forex trading bot, how it works, its costs and demerits.
What Is a Forex Trading Bot or Robot?
A forex trading bot or robot is a software program based on foreign exchange market price movements that signal traders to buy or sell a currency pair at a given point in time.
These systems can be automated and can be integrated with online forex brokers or exchange platforms. The bot helps to generate trading signals. Most of these robots are built with MetaTrader, using the MQL scripting language, which lets traders generate trading signals or place orders, and manage trades.
What Does a Forex Robot Cost?
The price varies based on which system is used. For example, the 1000pip Climber System has an introductory one-time price of $97, while the GPS Forex Robot has a one-time charge of $149. Other systems offer higher-end options for a monthly or yearly subscription price.
Can a Forex Robot Trade Cryptocurrency?
Yes, a Forex robot can be used to trade cryptocurrency. One such robot designed for that purpose is Coinrule, a fully automated crypto trading robot that has subscription prices ranging from zero to more than $5,000 per year.
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Does a Forex Trading Bot Work Constantly?
A forex trading robot, or bot, can be programmed to trade constantly, 24 hours a day, seven days a week. However, allowing this level of ongoing trading potentially removes the investor from the process. Many investors may prefer to be more active participants in the trading process.
Are forex bots profitable?
While most forex robots do ‘work’ in the sense that they are programmed to automatically carry out trades, unfortunately, they are not foolproof so they cannot provide any guarantee of long-term profits. At best, they are a useful tool which can be used by forex traders to help make informed trading decisions.
Demerits of Forex Bot
1. Forex robots are designed to remove trading’s psychological element, which can be detrimental.
2. It is very risky when buying this trading system. Oftentimes, companies will spring up overnight to sell trading systems with a money-back guarantee before disappearing a few weeks later. They may cherry-pick successful trades as the most likely outcome for a trade or use curve-fitting to generate great results when backtesting a system, but these are not legitimate systems for assessing risk and opportunity.
3. They generate profits over the short term but their performance over the long term is mixed. This is primarily because they are automated to move within a certain range and follow trends. As a result, a sudden price movement can wipe out profits made in the short term.
Closing Thoughts
There is no such thing as a “holy grail” for trading systems because if someone did develop a money-making system that was failproof, they would not want to share it with the general public.
If you are a forex trader, you may want to consider developing your own automated trading systems rather than take a risk on third-party forex trading robots. The Institutional Trading Concept (ITC) which allows you to like big institutions is however a good option. You can learn this by joining a Forex mastermind.