A forex robot, also known as an expert advisor (EA), is a computerized software that helps traders automate their trading process. A robot can send signals when certain technical combinations happen or they can automatically open and close trades. These tools are built by advanced traders who are proficient in both trading and programming. In this article, we will look at some of the best-known forex trading robots, their features, and some precautions to take when using them.
What is a forex robot?
The idea behind bots is a relatively easy one. Basically, to trade forex and other assets, traders use a combination of technical indicators like the Average True Range (ATR), Average Directional Movement Index (ADX), moving averages, and the Relative Strength Index (RSI). Using these tools, they can easily tell when to buy and sell a currency pair.
These traders can use the manual process or automated process. In the manual process, they look at charts and identify the best buying and selling positions. Alternatively, many traders use programmed robots that either send signals or open trades automatically. Robots can work even when the trader is not at his trading desk. It can also scan multiple charts for entry and exit opportunities.
Expert Advisors are created using several popular programming languages. Most MT4 and MT5 robots are created using the MQL4 and MQL5 languages while most TradingView bots are created using the Pine Editing Language. Other popular programming languages popular with traders are Python, Ruby, Perl, and C++.
How to use a forex trading robot
There are two basic methods of using a forex robot. The most effective one is to build the bot from scratch using your preferred trading strategy. This approach is recommended to a person who has been a successful forex trader for years. That’s because they will apply their trading experience to creating the bot.
For example, if you have successfully used the moving averages for years, you can easily translate this strategy into a forex robot.
To use this approach, you need to have some experience in programming using some of the programming languages we have mentioned above. Still, you can use templates that are available in MT4 and 5 and TradingView to build your trading robot.
The second approach is to buy a prebuilt robot. This method is ideal for people without experience in trading and programming. You can buy trading robots from many marketplaces, including the one provided by MetaTrader. There are thousands of such robots, as you can see below. Most of them are offered for free while others cost thousands of dollars.
MT5 Expert Advisors
Top forex trade robots
With that in mind, let us now look at some of the best forex trading robots. We created this list using MyFxBook, a website that provides users with the historical performance of top bots.
Pivot points are essential tools used to identify key support and resistance levels in forex and other assets. The popular types of pivot points are standard, Woody, classic, Camarilla, DM, and traditional. When used well, these points can accurately help you predict where an asset’s price will move to. They work best when used in combination with other technical indicators and price action methods like the bullish flag and triangles.
The Pivot Prof is a MetaTrader 5 and 4 trading robot that is built on the idea of pivot points. The robot costs $60, making it relatively affordable to most day traders. When used, it can show you about 120 levels of information per currency pair. It is also usable across all currency majors like the EUR/USD, GBP/USD, and USD/JPY, among others. You can also use it on minors like the USD/TRY and USD/ZAR.
As part of the configuration, Pivot Prof asks you to select the currency pairs you want to analyse, the timelines, and the formulas to use. The formulas available are Standard, Camarilla, DeMark, and Fibonacci.
Pivot Prof is rated well by its past customers. Also, the developer responds to all questions raised by the customers.
Scalping is a trading method that includes buying and selling currency pairs within a short period. Most scalpers hold positions for as little as three minutes. The idea is usually to make a small profit for each of the tens trade that they open every day.
The Advanced Scalper forex trading robot was developed to help traders open and sell trades within a short period. It can be used to completely automate the trading process. It can also be used as a tool to help manual traders identify entry and exit positions.
Some of its key characteristics are that it always adds a stop loss for all traders. It also a spread filter that helps prevent trading in extremely difficult markt conditions. It also has a slippage control and advanced stop loss management.
The Advanced Scalper costs $390. Alternatively, you can buy it for $149 to use it for a month or $249 to use it for a full year.
Red Hawk is a popular MT5 and MT4 robot that uses the mean reversion approach. This simply means that it works well when there is no much action during the market session. It works well on forex majors like the EUR/USD, USD/JPY, and GBP/USD, among others. It is also recommended for hedging accounts.
It comes loaded with a safety stop loss and take profits for each trades. It also avoids the relatively risky trading approaches like Martingale and grid. While the robot comes with a default lot size of 0.01, you can change it to match your preferred trading strategy. The Red Hawk sells for $299 but you buy a three-month subscription for $149.
RoFx is one of the best-known forex trading robots in the world. It was developed in 2009 and is widely used across the world. This success has seen the developers open offices in the US, UK, and in Hong Kong.
Unlike the other forex robots we have highlighted above, RoFx is built using proprietary technologies that the company has not disclosed. However, it is highly rated. It has generated more than 80% annual returns since 2009. According to MyFXBook, the system has opened more than 272,000 trades and won 80% of them, as shown below.
ROFX historical performance
AW Swing Trading EA
Swing trading is a popular trading strategy that aims to buy and sell currency pairs and other assets when they make major moves. For example, swings are popular when there is a major economic release such as when a central bank makes an interest rate decision or when a president makes an important speech.
The AW Swing Trading EA is a forex trading robot that helps you capture some of these moves. It mostly works well when there is a corrective price movement. It has tools to filter the trend, dynamic retracement size-based on volatility, and built-in overlap. After installing it you will need to verify your preferred order sizes, stop loss levels, and stop-loss levels.
The AW Swing Trading advisor costs $395 or $295 for six months.
Arbitrage is a popular trading approach that involves buying and selling two correlated or inversely correlated assets. The Arbitrage Trading bot is developed based on the general principles of correlation. It was developed in 2015 and has a successful track record, according to data compiled by MyFxBook. In this period, it has opened more than 2,000 trades. More than 97% of these trades were positive.
Arbitrage Trading uses arbitrage in a unique way that looks at the prices that are offered by various brokers. For example, broker can quote you GBP/USD at 1.2004/1.2006. Another can quote the same pair at 1.2000 and 1.2002. Therefore, if you buy at the second broker and sell at the first broker, you will make a small profit. As such, Arbitrage Trading has been popular because these market inefficiencies happen all the time.
The chart below shows the performance of Arbitrage Trading EA.
Arbitrage Trading forex robot costs $1,000 for a lifetime access. You can also pay $99 for a two-year subscription. It accepts payment methods like Skrill, Neteller, and Bitcoin. It also hundreds of verified reviews.
GPS Forex Robot
GPS Forex Robot is another forex trading robot that is highly-rated in MyFXBook. The robot has opened 19 short trades and won them all. It has also opened more than 463 long trades and won 94% of them. A look at its history shows that it has made money every month since 2012.
Like most advanced forex robots, GPS Forex has not shared the technical combinations it uses. Still, based on its results, it seems like a relatively good forex robot. The chart below shows its MyFxBook dashboard.
Do forex bots work?
A common question among many traders is whether forex robots work. The answer to this question is both yes and no. In our experience, we have heard stories of traders who have achieved a lot of success by using robots. Also, it is commonly known that many big quantitative hedge funds tend to perform better than traditional robots.
At the same time, we have seen and read personal stories of traders who have lost a substantial sum of money using robots. Indeed, more traders using bots lose money. This happens for several reasons.
First, since most of them are newbies, they have execution problems. For example, a trader will buy a robot and directly implement it right away without reading instructions. This is wrong since all robots have a guideline on how they work.
Second, many traders will put their trust in robots and avoid making any risk management precautions. For example, they will open trades without a stop loss and have a supersize amount of leverage. No matter how good a robot is, these practices will often lead to substantial losses in the long term.
In our experience, we believe that most forex trade robots don’t work as advertised. However, among the many, there are a few that perform exceptionally well.
Backtesting forex robots
A good method to reduce risks when using forex trading robots is known as backtesting. It is a process where you use historic data to identify the overall performance of a bot. You should always spend a few weeks or months doing the backtesting before you use it in a live account.
Fortunately, popular trading platforms like TradingView and MetaTrader have a free backtesting feature. The chart below shows the results of a simple trading bot in MT5. As you can see, the robot opened 42 trades during the testing period. With an initial deposit of $10,000, the robot generated a loss of more than $6,000.
This does not mean that this is a bad robot. Perhaps, the robot was not created to trade the GBP/USD on the 30-hour timeframe. Therefore, you should always read the description and ensure that you implement it well.
Robot backtest example