Choosing The Right Forex Robot - It's All About YOU

By Shaun Welford

Let's face it, you could spend days exploring the range of forex robots on the market - and still be none the wiser as to which one is right for you. Unless, of course, you know exactly what kind of trader you are. Are you into day trading? Are you a swing trader by nature? Are you inclined towards long-term trading? Perhaps you prefer to trade just one forex pair, or do you want buzz and variety of using robots that trade multiple currency pairs simultaneously?

Answer these questions and your search for the right robot becomes a lot more focused. A forex robot that only recommends one or two trades a week won't suit you if you're a day trader - so avoid it. Equally, if you're a swing trader, you'll want to avoid robots that recommend several trades a day. The latter can lead to overtrading which can deplete you account at a disturbing rate. It will also adopt a scalping strategy designed to return small profits rather than a larger number of pips. Just make sure that you're comfortable with the style of trading built in to your chosen system.

All of which raises another important question: should you trade one pair or multiple pairs? Robots designed to trade a single pair - most often the EUR/USD pair - capitalise on the fact that this is the most traded pair in the world. This can work well in a strongly trending market, but may perform weakly in choppy markets with very tight trading ranges.

What then are the advantages of choosing a Robot that trades multiple pairs? Well, to claim that these typically return a higher pip score would be misleading. There is no statistical evidence I'm aware of to support this. But you might simply be more comfortable trading multiple pairs - partly because of your desire to select specific pairs or pair clusters depending on your understanding of the market on the day.

And there's the rub. Ultimately, choosing the 'right' robot means choosing the one that's right for YOU. If you're in harmony with its trading strategy, comfortable with its risk management features, and willing to devote the time it needs to tweak and customise the settings, there's every chance you'll make more money than you lose.