Advantages And Weaknesses Of Forex Trading Robots (EA)
Autotrading Robot or often referred to as “Expert Advisor” (EA), is an electronic tool that works alone to find open trade opportunities, both open sell or buy on the forex market. Forex Trading Robot (EA) here is not physical. But a software for forex trading automatically. Without you doing the Buy / Sell command, the robot will do it yourself for you.
Speaking of EA, it will never end. Especially when compared to manual trading. So that the base and edges are clear, let’s peel what are the advantages and disadvantages of Robot Trading.
The Advantages of Forex Trading Robots
Here are some of the advantages of Trading Robot which is the main reason why many traders stop trading themselves and replace using EA:
Forex Trading Robots are able to run hundreds to thousands of instructions per second to comb and execute every forex trading opportunity. The workload was clearly beyond the limits of human ability, but it’s easy to do EA. However, keep in mind, not all Forex Trading Robots have that high performance, because it depends on the system that underlies its manufacture as well.
b. Not affected by emotions.
Under any market conditions, the Forex Trading Robot only carries out instructions according to programming standards, without emotional intervention. In that sense, EA will execute orders such as buy or sell and place Stop Loss and Take Profit exactly as the program formulation.
In contrast to manual trading, where traders are easily affected by emotions when facing price fluctuations. They will usually shift the position of SL and TP due to feeling greedy or vice versa, anxious to face the price that does not move as you wish. In the long run, these bad habits can be a barrier to success, so that emotion-free EAs are seen as superior.
c. Active 24/7, non-stop.
As long as it is connected to the VPS, Forex Trading Robots can work all day, non-stop. So, once a trading opportunity arises, the Robot will always be ready to execute market orders, at any time. In other words, if you use an EA, you no longer have to worry about missing out on trading opportunities even if you are busy with other activities or are resting.
d. Trading performance can be tested.
Because Robots always consistently follow the programming standards, their trading performance can also be clearly measured. Generally, the performance of trading robots is measured by the backtest and forward testing methods. So, before you buy a Forex Trading Robot, first make sure that the report performs well.
Want to buy an EA robot but have a headache proving its performance? Don’t be confused, this article will give you proof of the real performance of Forex trading robots easily and simply
e. New features are constantly being updated and developing.
As the development process of developing Forex Trading Robot, more and more new features also develop to keep up with market dynamics. For example, the news filter feature and invisible mode (to avoid brokers who stop-hunting).ALSO READ:
So you can enjoy the most advanced features, look for a Forex trading robot developer that provides auto-updates. With these features, Robot Trading will always be updated with the latest features.
Weaknesses of Forex Trading Robots
There is no ivory without cracking, Forex trading robots also have shortcomings, including:
a. It costs extra.
Trading using an EA robot certainly costs more than manual trading. In addition to spending money to buy the robot itself, you also have to regularly pay VPS rental fees. And believe me, the better the quality, the higher the cost. (Also read: Forex Trading Robot (EA) vs Manual)
b. Not able to adjust to certain market conditions.
When news releases are high impact, usually opportunistic traders take advantage of the fluctuation of price movements to make a profit. The activity was a cool name for news trading, and is usually done by scalpers. However, these activities are much higher risk than trading in normal market conditions; if you are lucky you can bring home a lot of money, if you are lucky the contents of the account can be sold out instantly.
Unfortunately, trading robots are not designed to be able to adapt to the situation. That’s because basically “the way of thinking” trading robot is designed linearly (notok straight, not adventurous), while at the time of news release the movement moves fluctuatively and randomly.
c. Demand special skills to manage it.
Uh, who said if you already use Forex Trading Robot (EA) don’t need any knowledge about trading? Precisely because the trading process is fully automated, at certain times when market conditions are out of the ordinary, you are the first person to take control.
For this reason, it is advisable to use a Forex Trading Robot if you have enough trading experience and have the sharpness of intuition in knowing when market conditions are not conducive.
Secondly, you also have to understand at least the terms in IT and the use of software to be able to install and maintain Forex trading robots. This needs to be learned so that the EA robot still runs according to the procedure.
d. Not all brokers allow the use of Forex Trading Robots.
Once again, EA can send tens to hundreds of market orders in a relatively short period of time. If enough traders use the Forex Trading Robot, the broker’s server may be burdened by a long queue of market orders. In this situation, the broker server could experience lag or even freeze.
To avoid server lag and freeze, some brokers will prohibit the use of Forex trading robots on certain types of accounts or pairs.
Read more at: https://www.seputarforex.com/articles/excellence-and- weaknesses-robot-trading-forex-ea-119858-31