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Pluses and minuses of trading advisors

Author: Patrick Dresdner
Patrick Dresdner
All publications of the author

There are some special programs which can be found in Forex market (foreign exchange market) sphere, they are called trading advisors. Like any program, trading advisor has its advantages, pluses and disadvantages, minuses. Many good forex brokers use such programs in their work. In order to describe the pros and cons of trading advisor more clearly, let's have a look at this program in more details.

What is a trading advisor

Trading advisor (robot) or it is also called exchange robot is a special program that allows you to speed up the work of the trader in several times. When choosing your broker, comparing the offers of brokers in the tab «Forex broker comparison» it is neccessary to find out, whether the trader is using programmed trading robots in his work.

Exchange-trading robot is fully or partially able to  replace the trader in the course of work in Forex market. What is most important, trading robot can be operated, you have to obey the orders of the trader, or it can work automatically, it means without human intervention. In fact, for its proper work on autopilot, it is required to set up a program of actions in advance.

Work of trading advisor is based on the fact that the program keeps track of its own movements in the market, index performance and so on. And based on these data, the program, in accordance with complex mathematical algorithms does calculations of future profits and conducts transactions on the exchange. Since it is a computer program, it is clear that trading advisor is not subjected to doubt, tireness or impulsiveness, its work is not only more effective than the work of man, but also more productive in terms of number of deals.

Even traders from a section of bank brokers «best banks offering Forex trading» will not offer a level of professionalism combined with the speed of work, as it is offered by a trading advisor.

Most uninformed users naïvely believe that the task of trading robot is only help the trader. But in fact, the main objective of such a program in the realization of the highly complex trading strategies. Such strategies, which cannot be made manually, due to their complexity and special nuances.

Like any other software-analog, trading robot has its pluses and minuses.

Advantages of Trading Robot, pluses of programm

The main advantages of this program are:

  • accuracy of performance;
  • speed;
  • enormity;
  • absence of emotions in the work;
  • the program is not subjected to tireness and makes no mistakes.

Accuracy - well, in this case, is more or less clear. Since this program, like any other computer program runs on a strictly specified course of actions. In fact, this can be explained as follows: the program seeks out specific words, numbers, figures and on this basis makes the transaction. If a person makes an application, he can make a mistake, well, for example a figure can be jammed and the application has already been drawn up incorrectly, the trader had not noticed it and put it into operation and that's all, the collapse of the transaction is guaranteed. With commercial robot such incidents will never happen.

Speed - even the most experienced trader, you have chosen strictly on the advice of the article about «How to choose a Forex Broker?», does not provide you with instant processing dozens of applications at the same time, but the trading robot is able to keep track not only of a few dozen, but even a few hundred securities prices. In addition, unlike the human robot will not be long to think about its actions, losing precious time. He immeadiately checks, considers, analyzes, decides and puts the application on the market.

Practice has proved that the traders who work with large volumes and trust the lion's share of the work to the trading robots have a huge advantage over their peers who are trading by themselves, using outdated methods of calculation and information of processing. It goes without saying, that only by using a specially designed trading robot, trader can increase the speed and capacity of his activity in Forex market and thus to increase his income in several times.

Cold-bloodness and absense of emotions - the practice of trading in Forex market. It has proved that a trader, even if you chose strictly on the criteria of your ideas about the ideal employee, like the section «Choosing a Forex Broker» can offer you, in emotional impulse one makes terrible mistakes that could throw himself at a complete financial collapse. In particular, if the card is not lucky, you have a panic. It is understood that a trading robot, as well as any computer program is not subjected to weakness to make decisions on an emotional impulse and such errors certainly will not be allowed leading to a foolproof trading strategy

The enormity of work - if the person, trader independently performs certain volume of work for a certain time, the trading advisor for the same period of time can do 4 or even 5 times more. In addition, a trading robot can provide you with the constant expansion of activity. With special settings, notifications and reports which will be sent on  time and perfect precision.

Absense of tireness - if a person is tired, he needs rest, plus sleeping, eating and other actions required in the life of modern man and as a result we get the minimum trading time indicators used with advantage. And now we take the work of Trading Robot - no fatigue, rest or sleeping need. This means the amount of work is maximal.   

Cons of Trading Advisor

Nothing is perfect in the world and even this ideal, from the ordinary point of view, program as a trading robot still has its drawbacks, minuses.

Minuses of trading robot are:

  • complexity of creation;
  • limited within the specified functions;
  • standard work in an irregular situation;
  • indifference to work;
  • absence of human intuition.

The complexity of creation - to create such a program as a trading robot is not just difficult, but incredibly difficult. So very rarely, someone can acquire such an assistant on his own. Option number one is to buy a trading robot. And let's say this is not a cheap pleasure, not a low budget offer for sure.

The limited process - it is a robot and it is incapable of thinking it can only operate on a strictly given plan, that is, there will be no other actions than those which were specified by the user. According to the severity of functionality and maximum guarantee of acceptance of correct decisions trading robot can be compared only with best Forex ECN execution brokers. And we must admit it is not always a good thing, since the ability to analyze the situation and make illogical, but at the same time winning solutions, a privilege only for thinking beings, but robot is just a program.

Standard - can be explained in the previous paragraph. Everything is strictly standard, there are no non-logical decisions in situations where it is necessary, there is no broad view of things, it's not up do date on crucial news like Brexit or US general elections, etc.

Unemotionality - it is not surprising that the most important feature, the main advantage of a trading robot, at the same time there is its huge minus. Now, if a person under the power of emotions can simply close work with the visible threat, the robot can't do it. When it is unfavorable scenario, following the set program, just come down all your capital invested by working in its working plan.

Absense of intuition - lots of people call the work on Forex market romantic, which is not surprising. Since there should be a place of intuition and prediction. But a robot is not subjected to emotions, intuition and so on. And sometimes some unique trading strategies that generate incredible income for a trader based just on the intuition.

Summarizing all the above stated we say, yes this trading advisor is a perfect trading tool. It is the most prudent, smart and effective. But it is only a tool for work, do not make it your vice chairman and put off all your activities on the machine. Finally, you will not have a good result, because a trading robot is just a tool for work, but not a panacea for errors or a win-win option for the trader.


Watch this video by an expert trader about their opinion on trading advisors:

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Risk Warning: Your capital is at risk. Statistically, only 11-25% of traders gain profit when trading Forex and CFDs. The remaining 74-89% of customers lose their investment. Invest in capital that is willing to expose such risks.