Safe Forex trading is an important part of trading success. Safety can be attained with the help of Forex advisors. These advisors are frequently referred to as “bots,” “robots”, “experts”, etc. Whatever the terminology used, the meaning and purpose are the same: to automate the trading process and, eventually, help the trader get profitable.
A Forex advisor is a software that is developed with a view to automate routine processes. Such software is based on a given algorithm, which can in turn be based on any type of Forex strategy. A Forex advisor can also be based on a trading system.
Forex advisors can be programmed for different trading platforms.
1. Automated advisors. If you use this Forex advisor, you will have very little to do because the entire process will be fully automated. The software will search by itself for appropriate market conditions to enter the market. It will establish positions and close them too, in part or in full. Such programs are also referred to as “expert advisors”. As a rule, they are fully automated and do not require any intervention on your part. The advisor will control the trading process entirely. All you will need to do is to ensure that your MetaTrader 4 is turned on at all times. Obviously, you will have to have continuous, uninterrupted access to the Internet. You will also have to keep an eye on the cash flow. You will have to watch your balance in order for the advisor to have enough money on hand to open new positions with a safe lot. This type of advisor involves minimum participation on your part once you have got your advisor in place. But you do have to be very confident in your choice of software before you leave the screen to have a latte or play with your children.
2. Partially automated advisors. A partially automated advisor plays an auxiliary role. You will have to analyze the market yourself, applying the software when you deem it appropriate. The software, in turn, will carry out its functions based on the algorithm of the software. Once the application meets the requirements of its algorithm, it will automatically turn itself off, and you will need to turn it back on manually for it to work again. Trailing stop expert advisors, trade assistance expert advisors, and news trading expert advisors can all be considered as partially automated advisors. These utilities do not trade on their own, performing instead a number of tasks and carrying out functions based on the predetermined and preset algorithms used in the development of the utilities. Unlike with fully automated advisors, you do not need to overanalyze your advisor to check for possible defects in the way it operates. It is sufficient to control the reasonableness of your trades before they are placed.
3. Trade assistance expert advisors. These advisors have few trading functions to carry out. Mainly, they display information. The Forex advisor Statistics is one such program. The real purpose of trade assistance expert advisors is to collect information and transmit it to your screen.
Now we can discuss the selection of a Forex advisor, bearing in mind that it is possible that you might need more than one advisor.
1. First and foremost, it is necessary to understand that not every Forex expert will trade based on an open algorithm, which is why you should always exercise care in choosing your Forex advisor. Try to find as much information about a Forex advisor as you can before you arrive at a conclusion and settle on your choice. Forex advisor developers often pursue only one goal: to make money off the sale of their products. Products created with nothing but their successful sale in mind should be distinguished from normal products. For example, there are Forex advisors that come with so-called Martingale methods. Sellers do not close disclose that information, so when you buy such a Forex advisor, you will be surprised by the discrepancy between the perfect graphs that you saw at the time of your purchase and what you see now that you have bought the advisor. You will find yourself in a situation where you are trying to make less than a hundred dollars in profits while risking hundreds, if not thousands, of dollars. For that reason I have always been against the use of such strategies. Not that the use of these strategies rules out successful trading. But it seems to me that this would entail the successful application of capital management rules more than anything else.
Unfortunately, it isn’t often that you are able to see a Forex advisor with an algorithm open for your review. But should the opportunity present itself, you will be well advised to try it in real life and see if the strategy is workable, and whether your understanding of it is complete. You should also assess the degree of risk that comes with unprofitable trades. Most important, you have to understand the profit potential of the advisor. Once you have tested its algorithm and seen how well it works in practice, once you are confident that it is workable, at that point you can consider its purchase and application in your trading.
2. Always try to canvass the Internet for all available information about the Forex advisor in question. Frankly, I am rather sceptical when it comes to online reviews. However, they are not useless. I always evaluate the reviews I read. Sometimes you can tell fake reviews from genuine ones. Lively discussions and debates, opposing viewpoints – they can all help you analyze the quality and genuineness of the reviews for a given product, and test it for objectivity. On the other hand, an abundance of reviews that seem “tailor-made” warrants scepticism. Such reviews should be taken with a grain of salt. In any case, the point is to obtain as much information as possible, put it all together, and decide whether a purchase of the product makes.