You might have come to a very compelling sales page for any one of the automated Forex trading systems, but do you know how it works?

Often called as an expert advisor or trading robots, Forex trading systems are online trading applications that can help you in creating a profitable and automated trading strategy without using a single line of code.  These trading robots are applied to the MetaTrader trading platform to offer pipe dream to the people.

While there are many Forex robots online, not all are efficient in generating profits. So, if you want to create Forex Robots online, read on to know more about creating a profitable and better expert advisor (a.k.a Forex Robot).

But first, Why an expert advisor or trading robot important?

An expert advisor is a program that offers the automation of analysis and trading process into a Meta Trading Platform. In simpler terms, it’s an online software, which is programmed in a way to follow the exact trading rules, make trade automatic and more.

While this software can help with many things, their prime job is to initiate a trade, manage opened position and help with existing projects. Spending trading signals to other people, copying trades to other MT4 trading platforms are some other tasks performed by the forex EA.

Now that you know about a Forex Robot, let’s dive in to know how you can create a profitable and better Forex Robots:

Use Free Historical Data:

Traders usually test their created Expert Advisors on free historical data from Dukscopy, which is a must for all forex EAs. However, if you are not using that automated trading strategy on Dukascopy, don’t expect the precise and accurate result.

Different brokers offer different price feeds and spreads, the reason why live trading results and backtest results are different for different brokers. But if you create and test best Forex robots using previous historical data from the same broker account, where it previously was trading, the chance of you creating data and having positive results will excel.

Should Have Good Risk To Reward Ratio:

While a good trading strategy should have at least 1:2 risk/reward ratio, you can go beyond and try other long-term strategies. Though doing this will create a more difficult automated trading system of high ROI, it will give a small winning ratio and high profits.

Give The Robustness Test:

Make sure that every robot you create should pass the robustness test or the stress test. Experts suggest that if the system passes at least one stress test, the chance of winning and withstanding the market change will increase. As said, the more robust the test would be, higher will be the chance of winning.

Robustness also means creating the backtest of the same strategy with each test different from the previous one. For instance, if a strategy is tested, let’s say 100 times, and each time the historical price data is randomly changed by 10%, it means that these trading systems will also work with different brokers.

Demo Test All Forex Robots:

Give the Forex Robot at least 6 months or 100 traders to witness the winning trading strategy. Then, if you get the satisfactory results in the incubation period (6 months or 100 traders time), switch your trading strategy to a live account. Here’s what you have to monitor:

  • Winning ratio
  • Maximum drawdown
  • Total number of trades
  • Total profit factor
  • Consistency of trades
  • Consecutive losses, etc.

Create As Much As EA Experts:

Don’t just create one EA expert and expect to get profits. Instead, create new EAs every week unless you have 20, 30 or 100 EAs running. Also, try to create different versions of EAs and trade them on different platforms and frames.

So, those were some of the tips to succeed in automated or mechanical Forex Trading. Try them and make money. 

Published by Janice Cook