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Why you should not rely on forex robots
Written by: PaxForex analytics dept - Tuesday, 29 September 2015 0 comments
As the forex trading getting its popularity in the last decade, there are more and more people trying to find a different kind of ways of making profits from it. Many new traders who didn't manage to educate them self, and also are not patient enough, are getting desperately in the forex market with the idea of making quick profits. With this kind of mind set, they are throwing lot of money for trading softwares so called forex robots.
Forex robots have complex algorithms that enable them to do mathematical calculations based on the detail that they get from actual data from the forex market. These programs could analyze millions of data in less than a second. Some experts would say that these programs eliminate the user error factor. Decisions about entering or exiting a trade, buying or selling, depends on these calculations and trade signals.
First of all, why are those kinds of robots dangerous? The idea is that currency price will sooner or later come back to frequently present levels. Following this logic the robot opens additional trades, increases the
volume of lots or builds a pyramid of the orders. However, the price does not always return to the previous levels, so trading with “casino-type” strategies will one day lose you all or a significant part of the deposit.
Automated forex trading robots are available for traders to purchase over the internet. It is important to note that there is no such thing as the "holy grail" of trading systems, whether automated or not. If the automated system being sold was a perfect money maker, the seller would not want to share it. This is why big financial firms keep their "black box" trading programs under lock and key.
The hype in the forex market for automated forex trading will be always there. Because people are always looking for ways to earn money on autopilot with just a click of the button, therefore there will always be new forex robot coming out every other day. If you want to make forex trading your career, take some time and diligence to learn to trade forex. Your future should not be relied on some automated forex robot, it will not work forever. But once you have mastered forex trading as a skill, it will be with you for life.