For those of you who are new to the world of trading, you are sure to be surprised and wondering what a robot trading is? In short, this trading robot can be considered as a tool that can help you make a profit while trading.
So, what exactly is a robot trading? How does it work? What are the advantages and disadvantages? Check out the answers to all of these questions only in the following discussion.
Get to Know What a Robot Trading Is
Later, many people are curious about what a robot trading is. The term of robot trading has recently become quite popular. Of course, this cannot be separated from the rapid development of crypto and forex investments. The robot trading itself can be interpreted as a tool that can be used for forex trading automatically.
Trading robots are also known as EA or Expert Advisors where these electronic devices work by themselves to find open trade opportunities, be it open buy or open sell. Meanwhile, this robot trading is actually a software.
With trading robots, you no longer need to bother thinking about when is the best time to open sell or open buy. This is because the robot trading will operate automatically even without any orders from the owner.
What is a Robot Trading and How Does it Work?
Knowing what a robot trading is leads you to understand its use too. The use of a robot trading or Expert Advisor is to assist in carrying out various trading activities. Using EA will make it easier for you to trade because you only need to check occasionally
In addition, this robot trading also runs automatically. Even when you sleep, this EA software or robot trading will still work. So, even though devices such as your laptop or gadget are dead, the system from EX will still work in carrying out trading activities.
The importance of understanding what a robot trading is is of course very useful for beginners who have difficulty trading. Moreover, this trading activity is indeed not easy especially for beginners.
More than that, EA or robot trading specifically work in analyzing market movements. The robot trading will also analyze price changes and execute buying and selling.
What’s more, if you learn about robot trading, you can also manage the security of your trading funds. This security is certainly very necessary so that existing data does not leak and become a problem that can be detrimental later.
Advantages of Robot Trading
After learning about what a robot trading is, you also need to understand its advantages. The advantages of robot trading make it attractive to many people. Some of the advantages possessed by robot trading include:
1. Multitasking
EA or robot trading can execute hundreds to thousands of orders per second. This kind of workload is definitely beyond human capabilities, but very easy for EA.
Even so, you also have to remember that not all trading robots have high performance. The performance of the robot trading depends on the system running in it.
2. No Emotions
Under any market conditions, the robot trading will only carry out orders according to the programming conditions. EA will decide buy or sell orders according to programming formulas only. This is of course different from manual trading which is carried out by direct humans.
When facing market turmoil, usually manual trading will be influenced by the emotions of the trader. Traders can shift SL and TP positions because they feel less confident or too greedy.
3. Active For 24 Hours Nonstop
The forex trading robot is able to work for a full day without interruption with the record that it must always be connected to a VPS. During that time, the robot will always be on standby whenever there is a good trading opportunity. In short, when you use an EA, you no longer have to worry about missing out on good trading opportunities.
4. Trading Performance Can Be Tested
In general, robot trading consistently follow programming standards. Therefore, the performance of this robot can be easily measured. The methods that are usually used to measure the performance of a robot trading are the forward testing and backtest methods.
Therefore, it’s a good idea to see a trading robot performance report before you buy it. From the report, you can consider whether the robot is worth buying or not.
5. Up-to-date features
Robot trading will always be developed so that they are even better. In the development process, usually EA will always be equipped with the latest features that are definitely up-to-date.
Weaknesses of Trading with Robots
You certainly understand very well that nothing is perfect in this world, therefore it is important to know the details about what a trading robot is and the weaknesses it has. The weaknesses of robot trading include:
1. Require Additional Fee
Trading using EA will certainly require a lot of costs compared to manual trading. You need to prepare money to buy a robot, pay for VPS rental, and other needs.
2. Not All Brokers Allow The Use Of Robot Trading
In general, there are several brokers that prohibit the use of robot trading on certain types of accounts. This is done in order to avoid server freezes due to long queues of market orders caused by trading robots
From the discussion above, of course you already understand what a robot trading is. You can try and prove yourself the ease of trading using EA.
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Author: Muhammad Zaki Fajrul Haq
Follow me at @mzfajrulhaq (Instagram) or @ZakiFajrul (Twitter).