How do I choose a Forex robot?
Before you invest your money, it is essential that you test the robot with a demo account and do backtests on historical market data or checking verified trade history.
Forex robots (EA) have become very popular ever since the MetaTrader 4 trading platform was released. The many commercial EA offers and frequent scams do not make it any easier to find a robot that genuinely works well.
To find an EA that fits your trading style and risk tolerance, you need to analyse various statistics such as maximum loss (drawdown), profit ratios and the risk-to-reward ratio.
Forex trading is very risky, you can lose all of your money even with a robot that displays good statistics. Before using an expert advisor with a real trading account, you need to know in advance the financial risk that you can afford to take. The most profitable robots are usually also the most risky ones. So you also should choose a robot based on your appetite for risk.
How we find the best forex auto trading robots
The best forex EAs listed above were all handpicked by our trading experts after rigorous testing under pre-set performance metrics. Only those that passed our high standards are featured on this page. We do this so that you can trust our best forex robots for 2020 reviews to be unbiased and honest.
Below you can learn about all of the criteria we consider for our list of the best forex auto trading robots. This will not only help you to choose the right robot for you, but it’ll also help you to avoid making simple mistakes when utilizing trading robots.
Each robot on our list has performed well in the following categories:
Backtesting – Backtesting is a process where the forex robot is subjected to historical price data and market conditions to see how well it would have stood up to previous trade scenarios. The first step towards knowing if the automated forex-trading robot has a chance of being successful is by subjecting it to backtests. We’ve listed only those robots that have undergone the best forex bot backtests available in the market today. Therefore, you can be sure that you are looking at forex robots which would have performed well over time.
Live trading results – Forward tests involve testing out the best forex auto trading robots on the present market conditions. This allows them to replicate in real-time what the backtests have shown they could do historically. Forward tests involve introducing these forex robots to live accounts with real money, as well as virtual accounts that feature simulated trades. Simulated trades in a demo account offer controlled conditions for forex EA use. Real-time trading allows the robots to work on a live account in real market conditions. While there is capital risk associated with this type of testing, it is the ultimate test to see if an automated trading system can function in live environments. A mantra of the forex market is that past results are not always indicative of future performance. Therefore, future performance with a live account is a relevant part of the robot testing process.
Drawdown – The drawdown is the difference between the highest value of your trading account and the next lowest point the trading capital gets to. The essence of measuring the drawdown of a forex robot is to know whether it subjects the account to too much risk in its quest to achieve its profit goals. On a per-trade basis, a properly functioning forex robot should not place a position that forces an account to go too negative before the market turns and puts a trade back in profit. If a trader’s account size is too small to handle such wide dip-recovery cycles, then losses could occur. Trades could end up being closed prematurely as there is no capital to give the trades room to recover. Consecutive drawdowns negate the principles of lesser risk, greater reward. The risk-reward ratio (RRR) for every trade should ideally start from 1:3. This translates to 1 pip risked for a reward of 3 pips. At this ratio, it takes 3 losing trades to wipe off profits from a winning trade. The best forex robots should be able to enter trades only when the minimum RRR is met. If consecutive drawdowns are huge, then this target will not be met, and the trader’s account will suffer. In our table, only robots with the lowest drawdowns find their way into this list.
Limitations on order size – Some robots out there only work well with certain order sizes. We believe that a forex robot should be able to reproduce the same outcomes no matter the order size. However, the approach we use is to ensure that a robot has proper position sizing algorithms within it. Should a forex trading robot not be able to handle a variety of order sizes, it will not make it to our recommendation list.
Reputation and reviews – Every robot listed here undergoes a background check. These checks involve getting reviews from verified users. We check things like how long it has been on the market, user experiences, and other information about the robot. We also check the originality of the product to ensure it is not a remake of a decompiled robot.
Trading strategy – A good trading robot will either come equipped with a pre-programmed trading strategy or allow you to custom input a strategy based on your trading requirements. In terms of strategy, we further check to see how many strategies can be employed, which platforms the forex robot is compatible with and how many assets it can trade. We also check to see if the robot incorporates hedging or scalping strategies. The trading systems should be adaptive, being able to utilize studies or signal-finding data and be adaptive with charting packages in combination with other indicators. You should also be able to set stop loss and take profit parameters in combination with the default settings.
Risk settings – We also check the risk settings of every forex robot. The best forex robots typically have risk classifications: conservative, balanced or aggressive. Every robot has a spectrum of operation and we check to see where each robot is on the available risk spectrum.
Price and refund policy – A robot’s performance cannot be truly assessed by the cost of the software. An expensive robot is not necessarily a good one. We check to see if the price offered by the robot’s vendors provide value for the purchasing cost. We also check to see if a free trial is offered and if there is a refund policy in place for unsatisfied customers.
How we test forex robots
All robots are tested fairly and objectively without preference for one or the other. The same testing conditions are used as much as possible to make our rankings reliable and transparent. We un tests using a VPS on different platforms for at least 30 days for each forex EA. Some of the best forex brokers offer a free forex VPS for live account holders.
What Is an Automated Trading Strategy?
What Types of Automation Are Available?
1. Fully Automated
Pros and Cons of Using a Forex Robot
Advantages of Using Forex Robots
They Can Trade 24/7
They Are Not Influenced by Human Emotions
They Can Work Faster and More Effectively
They Can Operate More Complex and Sophisticated Trading Strategies
They Make Backtesting Easier and Faster
Anyone Can Use Them to Get Started With Forex Trading
Disadvantages of Using Forex Robots
You Need a Strong and Constant Internet Connection
They Have No Capacity for Human Thought or Imagination
They Are Not Good at Reading and Interpreting Fundamental Data
They Are Vulnerable to Non-Trending Markets
Most Forex Robots Are Scalpers
There Is a Risk of Data-Mining Bias
They May Be a Scam
Are Forex Robots Legal?
Do They Actually Work?
How to Use Forex Robots Successfully
1. Don’t Expect Too Much
2. Do Your Research
3. Use the Trial Software First
4. Set up Trading Parameters
5. Keep a Close Eye on Your Robot
Things to Consider
How to Tell If a Forex Robot Isn’t Legit
How to Pick a Legitimate Forex Robot Seller
How to Design an Automated Trading Strategy
Decide on a Trading Plan
Define Your Trading Rules
Choose Your Risk Settings
Code Your System
Backtest Your System
Forward Test Your System
Monitor and Analyse
What Are the Benefits of Forex Trading?
10 Main Benefits of Forex Trading
1. It’s a Large and Global Market
2. It’s Good for Beginners
3. You Can Trade 24 Hours a Day
4. There Are Low Transaction Costs
5. You Can Benefit From Leverage
6. It’s a Market With High Liquidity
7. Volatility of the Forex Market
8. You Can Buy or Sell Currency Pairs Depending on the Market
9. There’s Good Technology for Trading
10. It’s Well Regulated
Why should you use a forex robot?
The best forex trading robots provide you with several benefits. Some of these include removing emotional stress from trading decisions, improved time management from reduced monitoring of trades, and the ability to explore multiple asset classes at the same time. With such a wide range of trading robots on the market, there are suitable options for everyone regardless of your trading requirements or experience. Below you will find a list of some additional advantages you will gain by using an fx trading robot.
The chances of missing trading opportunities due to physically being indisposed are eliminated. This is especially true when using a VPS.
The robot does all the analysis, which saves you the stress and time of doing it yourself.
A robot can interact with large amounts of data within a short period. If the coding is done correctly your auto trading system can do some truly amazing things.
If you want to run a copy trade service, a forex robot is indispensable to the entire arrangement.
A well-programmed trading robot can execute trades based on nanosecond information, creating profit opportunities that might otherwise be impossible.