A forex bot works thanks to a mathematical algorithm designed to place orders in place of the trader. It analyses and processes various signals from the stock market and then places buy or sell orders. The software analyses the markets 24 hours a day non-stop. In other words, automatic trading is a technique that uses predefined programs to activate or stop positions for the investor or trader. It saves you time and avoids the emotional aspect that can lead to large losses.
Forex bots also allow you to adopt a backtesting strategy to give you more information on the losses incurred and the potential gains. This strategy is based on historical charts before investing your funds. However, as an investor, you should know that statistical data is not always the same as the real world, especially in trading.
In short, a trading bot automatically carries out your orders by opening or closing them according to the predefined program. It is especially interesting in that it allows you to reduce your losses while making money.
How to choose the best Forex trading bots?
Nowadays, trading novices and professionals alike use trading bots to maximize profits. However, not all forex bots on the net are reliable and efficient, so you should choose according to these 3 criteria below to make money:
Automatic or semi-automatic trading
Although manual trading is out of fashion, the question between automatic and semi-automatic trading divides traders around the world. Since the globalization of the internet and the proliferation of online trading, both beginners and professionals have taken to automatic trading. However, many individuals who were not fully aware of how these forex bots work have lost their investment without even understanding their counter-performance.
On the other hand, financial professionals continue to make a lot of profit using the trading platform. The question then arises, how did the professional traders do so well while the novices saw their money go up in the air? The answer is clear, professional traders have favored semi-automated trading so that they can drive their own algorithms. Indeed, semi-automatic trading allows them to have control over certain tasks that require human intelligence such as good strategy. As a result, automatic trading is reserved for novices who do not have much in-depth knowledge of the stock market, while semi-automatic trading is the prerogative of professional traders.
Free or Paid Trading bot
Of the many online forex bots, few are reliable and will make a fortune in the long run. So it's not enough to pick the first bot you find on the search engine results page, it's better to do your homework and trust a reputable bot used by many traders. It is clear that free trading software seems more interesting to save money, but paid software is more efficient because it is more complete.
With a free platform you can generate good profits, but with luck, unlike paid software which has an advanced algorithm that can replace the intelligence of a professional trader. If you know computer programming, you can design your own trading bot, however, this will waste a lot of time and money in the testing phase. That is why the easiest solution is to turn to paid bots designed by professional traders. Your investment will quickly pay off.
Which trading platform and which language?
There are many different trading platforms and programming languages to choose from when designing a trading bot. Don't get carried away by your taste for the exotic, opt for tools that have already proven themselves in the professional trading community.
Trading bots or robots are a hit with beginners because they are easy to use and allow trades to be made automatically. Indeed, they do not require doing market analyzes and adopting a strategy that requires great knowledge of the stock market.
With the proliferation of trading robots on the net, it has become difficult to identify reliable stocks and scams that lose a lot of money!