Advancing computer software technology has lead to a lot of interest in automated forex trading robots. After all, what could be better than to place a relatively small amount of money in a forex brokerage account, say $1000 to $5000 dollars, and see your account balance double every month or two while you are busy enjoying life? Is such a happy result possible or is it just another Internet dream?
It is important to realize that the forex market itself is huge and very genuine. The forex market is by far the largest financial market in the world and involves the world’s major banks, brokerage firms, and trading houses. The forex market is open 24 hours a day, 5 days a week. Trading volume is usually 3 to 4 trillion USD a day. There is every opportunity for a competent disclipined trader to take a juicy profit from this huge pool of liquid capital. Unfortunately, even with all of the opportunity to prosper probably a good 95% of forex traders defeat themselves, fail to cash in, and end up losing money.
Why is the lousy failure rate among forex traders so high? A few reasons follow:
1) Many traders completely lack discipline. Being unable to keep your emotions under firm control and over trading can result in a series of losses that add up to disaster.
2) Forex traders tend to use far too much leverage. When you trade at 100 to 1 leverage, which many forex brokerage firms offer, only a 1% adverse market move will wipe you out. You would be wise to trade at no more than 10 to 1 leverage or even 5 to 1, but few forex traders are able to contain themselves and trade at the maximum (and dangerous) amount of leverage offered.
3) Most traders have a poor money management strategy. They enter the markets far too often and at price levels where they take on poor risky trades.
4) New forex traders often lack a solid forex education. Many beginners believe that they can open an account, throw a couple of thousands dollars at it and easily make a profit. Usually this is not the case. In order to become a successful trader, you need to educate yourself in every aspect of trading, like learning how to read charts, practicing in a demo account, computing the risk of entry, learn to follow major trends, and others.
5) Novice forex traders don’t use the right trading tools. It is essential to follow a solid well developed trading plan and to use reliable forex software and a trading platform that can help you to determine the direction of the major market trend for the currency you are trading. You will need help in determining pin point high potential, low risk, entry points.
One very serious problem in trading forex markets is that they are open continuously from early Sunday evening (in the USA) until late Friday afternoon. No one can stay sharp and focused over that long of a time period.
A good forex expert advisor trading system will trade better than the majority of traders. For one thing the robot is not at all influenced by emotions. For another, a good automated forex trading software will only enter the market when there is a good chance of a favorable outcome. Trying to monitor the forex market 24 hours a day is crazy and nearly impossible. By using an automated forex robot trading system and following a sound money management plan most traders will stand a much better chance of trading at a profit. Another big plus…once set up the forex trading robot is a tireless unselfish worker who toils away 24 hours a day and yet gives you all of the profits.