Simple words about forex trading
Despite the cryptocurrency trend and the opening of many cryptocurrency exchanges, as well as the transition of many traders from the forex market to the cryptocurrency market, trading on the forex exchange has not become less in demand. It is even worth noting that, on the contrary, competition with cryptocurrency exchanges pushed brokers and traders and programmers on the Forex exchange to create more favorable and profitable conditions for their clients, to open new types of products for earnings, and to give new opportunities. Well, if we take into account the fact that the usual currency (dollars, euros, francs, pounds, etc.) really exists, and its turnover or volume is controlled by banks, and not by the unknown creators of some uncontrolled cryptocurrency, which in fact is only a program code and No more, it is safe to say that Forex is a powerful and reliable exchange that will always exist.
There are many currencies, precious metals and stocks in the world. It is this product that is traded on the Forex exchange, some buy, others sell, all as in the real market. But how to understand what to buy, and even more important to understand when to buy exactly something specific, and then profitably sell. In fact, no one knows this, everyone only analyzes and predicts whether the rate will rise or fall. This implies two basic terms, fundamental and technical analysis. The basis of all strategies is precisely these two types of analysis.
Fundamental analysis includes the study of the news background, and on this information to build a strategy for buying / selling currency or precious metals. Simply put, we watch news, read newspapers, analyze the political situation in the world. For example: they promise a sharp increase in oil prices, which means that the exchange rate of gas station countries will also go up.
Technical analysis is already a mathematical calculation, the basis of which is the previous movement of currencies over the history of the Forex exchange within short time ranges – hour, day, month. It’s simple, we study the course changes for previous periods and forecast the course for the future. Technical analysis has many different forecast strategies and is used more for short-term trades.
Types of robots and their strategies
It is not difficult to guess that the work of the trading robot is based on technical analysis, but this uses not only the strategy to open / close orders according to the mathematical forecast, but also the money management method, which determines the amount of each transaction.
From this we can conclude the classification of forex trading robots. Firstly, all trading robots for forex trading are divided according to the work strategy, and secondly, robots for exchange trading are divided according to the money management method.
Consider the separation of robots by exchange trading strategy
- Forex robots are automated trading trending. This is a type of forex currency robot whose strategies are based on trend indicators. It is based on assumptions about the trend of growth or fall.
- Flat trading robots. Flat, or as it is called a channel strategy, organizes trading, buying near the support level and selling near the resistance level. A certain tunnel is emerging within the framework of which trade is being conducted.
- Forex robots scalper. Able to conclude many micro-transactions in a short period of time. They are characterized by small take profit levels (percentage of profit from the transaction) with relatively large stop loss orders (manual stop at a small minus, when the market turns against the current).
- Automated forex robots combined. They contain several types of strategies in their algorithms at once, combining them and using the best sides of each.
And also consider the separation method of money management.
In forex jargon, the money management method is called money management. It is the choice of method that determines the rate on transactions and the expected profit, which will determine how profitable the Forex robot will be.
- Martingales – types of exchange robots for private investors based on the Martingale method. A method invented for playing roulette, if the bet didn’t enter, double it, didn’t enter again, double it again. So, we do it until the bet gives profit, as a result, the last bet compensates for all previous drawdowns. Despite the rather risky scheme, it is very popular and shows good results. Of course, at the same time, there are many nuances on how to properly use this money management and limit the number of open orders so as not to drain the entire deposit with a long negative market movement.
It is worth noting that this type of money management has its own branches:
- Anti-martingale is the reverse of martingale. Every time we make a profit, we increase the lottery, and when a loss, we reset the lottery to the initial one.
- Family martingale – for every losing trade, we increase the lottery by a certain amount, and for every profitable trade we decrease.
- Averagers – Forex currency robots working on the basis of transaction averaging. If an order goes, for example, in a minus, then the strategy implies the opening of one more (or several), in the same direction as the unprofitable one, but at the same time increases the amount of the lot (rate). The task is to bring one of the lots into profit, which compensates for the loss of the rest.
- Fixed lot robots – when, all bets are made the same amount or completely fixed or an exact percentage of the deposit amount (which is more profitable in the future).
How to choose the perfect robot
This issue should be approached with all seriousness, as you are looking for a tool for earning in the form of a forex robot program, to which you will entrust your capital. Therefore, you can’t rush and rush here, you need to do a lot of serious work to study all the ratings of Forex robots and choose your option. It is likely that even several different options and at the same time diversify their risks.
What should you pay attention to first of all
- Reviews of private investors with a stock robot. It’s advisable not only to find laudatory reviews about a certain trading robot for exchange trading on the Internet, but also to communicate with real people personally, to find out what pitfalls are waiting for you and how much their robot is really profitable.
- Long-term trading statistics for this forex trading robot. The result of trading in one month is not an indicator, the minimum period is three months of successful trading, well, of course, if there are statistics for half a year or a year, then this is even better. If you are assured that this is the best exchange robot, but there are no statistics on its trading even for 3 months, then there is no point in risking and checking with your capital when acquiring such a robot.
- The maximum drawdown for the entire trading period, which is in the statistics. It is important to understand that if an automated Forex robot is constantly in a drawdown of more than 50% for half a year, but at the same time makes a profit, there is a very big risk of losing your capital at any time.
- Availability of technical support, periodic updates. Forex robots do not know how to read news and adapt, this can only be done by traders. Therefore, it is very important that there is technical support that gives recommendations for which currency pairs the season is now and which are better not to touch. Plus, receive updates due to changes in the market or the identification of any bugs in the robot.
- Price Forex Robot. Of course, there are many free forex robots and you can well use it. The only caveat is that it meets all the requirements described above, which is very unlikely. Since this is all the same commerce, and what’s the point of making someone a free trading robot, and then follow the updates, give recommendations and keep open statistics. And of course, to buy a stock robot at a clearly overpriced price, it should justify this price by fulfilling the items above 100% at least. When asked how much a Forex robot costs that meets our requirements, we came to understand that the price is approximately $ 300 to $ 500.
The best exchange robot should be able to make a profit with minimal drawdowns, have a reputation and work statistics for at least the last 3 months, there should be feedback from real investors, have an adequate price and technical support. If all this is, then you have found your ideal. The main thing is not to rush into the choice, but how to study all the offers, and do not forget, it is best to purchase where you will then be able to get advice on how to properly configure or how to work with it.