This is a generation of automated trading where most of the trade is done via the underlying system or the program. The system makes all the decisions on whether to buy or sell the currency and you just have to click a button to complete your trade.
There are two types of automated system driven trade
Forex Robot – Here everything is automated and such systems are often known as the black box. On the green signal of the forex robot you have to take a call on buying the currency whereas on the red signal of the forex robot you have to take a call on to sell the currency. Forex robots are apt for someone who is beginning on the currency trade and doesn’t know the tricks of the trade.
You can just buy or sell the currencies based on the signal from the forex robot. And you can only make changes in the system by altering the technical aspects of the system.
Signal Based – In this system the strategies of analysts and traders all over the over world are converted into signals for anyone who is interested in forex trading and they can make real time trades based on these signals which are eventually based on the strategies of the experts. One of the examples of signal bases auto trade is Zulu Trade.
Forex Robots and other automated systems came in to existence in the year 1999 when computers were revolutionizing the world of technology. That is the year when computer based companies tried to cash in by providing quick solutions for the people who wanted to trade thus providing huge opportunity to the general public to invest and gain through forex markets.
Forex Robots have several advantages over a human trade. With the use of forex robots more users can take part in the market, they are quick and data of many past years can easily be stored in them. They give an opportunity for beginners to learn the tricks of the trade and it is easy for them to start on forex trades with these forex robots.
Signal automation gives you an advantage of having expert opinion from all over the world. The financial pundits, whose knowledge is vast and their strategies can prove to be of great profit reaping tips.
It is said that in the past data stored in these forex robots were nothing but opening and closing rates of the currencies in each date. This can be done manually and there is not much technology involved in it. If a person has no knowledge of how to save data then he would never prove to be a successful trader anyways.
Another disadvantage is that the past data stored in the robot might be inaccurate which affects the entire system. There’s no human judgment where the robot is involved, it doesn’t take international news into account which can invariably affect market fluctuations. Robots by their nature merely take into account market fluctuations in terms of numbers and not the cause of said fluctuation. Thus it cannot precisely predict the market which by its nature is dynamic. Existing patterns, data and past benefits cannot accurately predict future returns; robots run on past data which as you can probably imagine might not reap future benefits. If a robot causes you to incur loss you end up losing the money that you invested on the system as well as the money invested in buying the Forex robot.
As the Forex market is huge and unregulated, Forex robots although making Forex trading available to the masses; make more and more people susceptible to fraud and scammers as most of the forex scams are done through these forex robots and other automated systems.
The best Forex robot for the year 2010 is said to be FAP Turbo. But again the system is not flawless and for you to gain profits out of forex trades you have to keenly study the markets and have all eyes and all ears open for international news that might have an impact on the currency market which is very news sensitive.