What is a Trading Robot?

Trading robots (Expert Advisors) are programs that are used on the Forex market, greatly facilitating the trading process.

The functionality of such programs can be quite different. In general, there are three types of advisors:

• Scripts - these are code snippets that are built into the trading platform so that the trader can do several simple tasks simultaneously.
• Semi-automatic experts - this class of advisors can analyze the chart, finding the suitable points for opening the positions and setting the stop orders. However, the trader takes all the decisions about entering the market on his own.
• Automatic - this class is the most common. They not only make their own analysis, but also open the deals, using the built-in algorithms. Such robots often work around the clock.

Principle of Operation

Generally, the robot is an automatic trading strategy. He excludes the human factor, guided only by clear data. However, experts also have their drawbacks. For example, they are not able to take into account the fundamental factors affecting the trade.

The strategies used by the advisers are usually proven, profitable methods. At the same time, the effectiveness of their application directly depends on the qualification of the developer.

The goal of the trend advisor is to quickly find the trends and open the positions. Next, it must catch the change of trend, and close the position, avoiding losses. Countertrend experts work within a flat, and trade on the price rollbacks from the borders of the channel.

To analyze the chart, advisors use the same tools as the traders. Some of them have a built-in set of indicators, which they watch constantly, checking data with the requirements of the trading algorithm. Advisors of another type don’t have the indicators. Such programs are constantly looking for candlestick combinations on the chart, and then decide whether to enter the market based on such an analysis.

Advantages and Disadvantages

As already mentioned above, the main advantage of such tools is the lack of emotions and subjective market assessments. Also, the robots react to any fluctuations in price fast, which is especially important for the scalping strategies. They can process a large amount of data simultaneously, and never get tired.

To provide the non-stop trading, traders install the advisors on the remote VPS-servers. This way you can turn off the computer and rest while your robot is trading.

However, these programs have their drawbacks. In addition to the lack of the fundamental analysis, experts may be prone to interruptions in their work. If the program gives an error and loses the user data, this can lead to big losses.

Choosing a profitable robot is not an easy task. Each trader decides whether he should use experts in his work, only by his own. However, it’s worth noting that from 30 to 50 percent of forex deals are made by robots, and they are used by all the major players of the market.