DIGIVESTASI - There are different types of traders in the Forex market, each with their own trading methods. However, all traders can be divided into two groups. First: Traders who prefer manual trading. Next are traders who opt for automated trading and use trading robots.

In this article, we will explain in detail how to make the most of trading robots and expert advisors. Trading robots are automated trading systems that autonomously manage a trader's flow of funds based on a specific algorithm. Automated trading programs and scripts are not limited by typical human weaknesses. Robots do not need to eat, sleep, or enjoy time with their loved ones.

Trading robots can also analyze the situation throughout the day during market opening hours, choose the best time to trade, manage account balances, and monitor order execution. In fact, the use of Forex trading robots greatly simplifies and automates the activities of traders.

History of trading robots

1st Generation, Prototypes of modern trading robots appeared in the late 1960s and early 1970s. These semi-automated systems were based on long-term trend-following strategies where wild price movements acted as signals. The market price tells the trader that the market is changing, and the trader himself decides what to do in this situation.

2nd Generation, In the early 1970s, several new robots based on statistical algorithms appeared. The first robot was "Momentum" which used various indicators to monitor oversold markets. Another was the "reversal system" which detected deviations from the average value of the traded asset over a period of time and calculated the point at which the probability of the price returning to the average value was greater than 50%. 

The third generation of trading robots rely on data sets rather than digital price and time data. This generation of robots detects what patterns are emerging in the market and signals a change in pattern rather than a change in trend. Algorithms evolve as society advances in technology. Therefore, as the speed of internet connections increased, high-frequency robots (HFT robots) emerged that could execute thousands of transactions per second. 

With the advent of artificial intelligence (AI) technology, there is no longer a need to write complex codes as AI has taken over this function. Machine learning (ML) technology helps create trading algorithms by observing trader behavior.

How to choose a trading robot

The actual efficiency of a trading robot largely depends on the algorithm controlling it. There are certain algorithms that tend to generate huge profits over a long period of time. Due to certain market mechanisms, the algorithm starts generating losses. Therefore, to make money on Forex, you need to not only install and run the program, but also understand the relevance of its working methods.

When choosing a robot, it is very important to take into account important information and parameters that directly affect the profitability of automated trading. There are several things to consider when choosing a trading robot.

1. Trading frequency. Suppose the broker charges a fee for opening and closing positions. In this case, the number of operations the robot performs is very important, because the more orders you open, the higher the fee you will have to pay. For example, Octa broker does not charge any fees for entering or exiting positions.

Since Octa only takes into account the spread, the trading robot can open as many orders as it receives without commission issues.

2. Risk-reward ratio. Forex robots are supposed to be profitable, but what does this concept mean? What does profit mean to you? After all, some people are happy earning $50 to $70 a week, while others want $100 every day. The bigger the expectation, the bigger the risk.  

Some robots are designed to trade with conservative strategies that involve low risk but don't promise big profits. Other robots are better suited for active trading, where you expect big profits and don't mind large balance drops.  

3. Terms and Conditions. No trading robot can trade with the same efficiency in all market conditions. Some robots are designed to trade based on trends, while others only give good results when trading in flat phases. You can usually tell the type of forex robot by its description.  If you're not sure whether it's better to trade trends or channel breakouts, be careful about the currency pairs you want to trade. Some pairs tend to form clear and relatively stable trends, while others tend to move in sideways channels. 
 

4. Sustainability. All automated forex trading systems should be tested first. To understand the stability of the Expert Advisor's performance, it is not necessary to use the Expert Advisor directly on a real trading account. You can test it on a demo account. For example, Octa's trading conditions are exactly the same for both real and demo accounts, allowing you to test your robot in conditions that are as close to real market conditions as possible. 

Why do we need trading robots? To make money, of course. Robots never get tired and can trade 24 hours a day, 7 days a week. Trading Robots are now available to buy or download for free. The most important thing is to carefully evaluate the robot you want to buy. 

For beginners, a trading robot can be a teacher in currency manipulation, and for professional traders, a robot can be an extension of the hand to implement the desired trading strategy.
 

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