Forex robots are all the rage these days. Everywhere you look it seems that someone is coming out with a new, latest, greatest Forex trading robot. Quite naturally each vendor wants you to choose their particular robot over the others available in the marketplace. It stands to reason that not all Forex robots are created equal. If they were all the greatest thing since sliced bread then most likely you would not be reading this as you are now.
Let's start off with a definition of what Forex robot is. A Forex robot is software that will make trading decisions for you as well as automatically place those trades with your chosen Forex broker. In theory, automated Forex trading is the ultimate in hands-off, hands-free profitability.
It is important to keep in mind that “automatic” does not equate to “profitable“. It is for this reason that we will now cover some of the disadvantages of using a robot in Forex trading.
You have no idea if its logic is flawed — A Forex robot is essentially a “black box“. This means that information goes in one end of the black box and while that information is in there you cannot see what is happening to it. The information that comes out of the other end of the black box in the form of a trade entry or exit. Without knowing and understanding the logic upon which the black box is based, there is no way to know whether the logic is flawed until you start to continually lose money.
Built to sell, not to profit — The reason you see so many Forex robots available in the market place is because people buy them. People not only by them, they buy millions and millions of dollars worth of them. Quite obviously some people have realized that the way to make a lot of money in Forex is to sell products to people who want to trade Forex! What this means for some is that the more appealing the product appears to consumers, the more money the product vendor will make through sales.
It is an unfortunate reality that some Forex robots are designed to appeal to consumers, rather than to be profitable for the long-term. There are a number of profitable Forex trading systems that don't look nearly as appealing as many of the hyped up systems that enjoy popularity today.
You won't learn how to trade Forex — This is one of the biggest disadvantages. Expecting to make money in the Forex market without learning anything about the Forex market is a recipe for disaster. In our instant-gratification society many beginning traders want everything handed to them on a silver platter, including profits. By using a Forex robot you may be entering into the Forex market as if it were a get-rich-quick scheme. If you shortcut the essentials of learning Forex trading you will be shortchanging yourself out of long-term Forex trading success.
While you can see that it is true that there are disadvantages to using a robot in Forex trading this does not mean that all Forex robots are bad. What this means is that you are placing yourself at the long-term disadvantage by making an attempt to take a unnecessary shortcut to profitable Forex trading.
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