Obtaining a Good Forex Robot
The use of Forex robots is one of the more controversial issues in Forex Part of the controversy stems from the reviews provided by several traders who have found themselves on the receiving end of some junk robots. Many accounts have been decimated by these robots, causing some traders to jettison their use entirely. However, the use of FX robots can greatly enhance the trading experience if they are used properly. In this article, we will try to identify the elements that make up a good Forex robot also known as EA's or Expert Advisors.
THE STARTING POINT
This is where the trader has to decide what robot to use. Experience has shown that there are very few commercially viable robots out there. The good ones are priced way out of the retail trader's reach. How is a trader supposed to make any money from FX trading if he has to pay close to $2000 for a one-time single-license Forex robot, or $300 subscription fee per month for Master-Slave versions of EAs? A beginner cannot afford such money and therefore the way to go is to construct one. The idea of building your own expert advisor is one that many traders will find scary. Don't fear. Building one is not rocket science but does require some elbow grease – yours preferably. Building your own Forex robot will require the following:
a) Identifying the programming language that the trading platform works with, because this is the same language on which the Forex robot will be programmed.
b) Getting a profitable strategy on which the Forex robot can be based.
c) Getting a programmer who is skilled in the use of any of the programming languages that your platform will work on.
d) Testing the completed Forex robot on a demo platform and debugging it for use on a live account.
a) The Programming Language
The most popular programming language used in forex robot programming is the Metaquotes Language. There are two versions of this language in use today. We have the MQL4 which is used on the MT4 platform, and the MQL5 which is used in the more recent (but still less widely used) MT5 platforms. These languages and platforms are not interchangeable: The MQL4 will not work on MT5 and vice versa.
There are other programming languages such as the ActFX used for the ActTrader forex platform, Lua for TradeStation and cAlgo for the cTrader ECN platform.
b) Developing a Profitable Strategy
I wish there was a way around this, but you will have to discover your strategy yourself. You have to use historical prices and find out why the currency pair went up or down. Use the technical indicators and chart patterns to experiment until you come up with a strategy. Test the strategy on a demo platform until a regular pattern emerges. Try out the strategy until you can iron out all the creases and get yourself a strategy that works at least 70-80% of the time. This part may take anything from a week to two years. This is the most crucial part of the process and you must persevere.
c) Locating a Suitable Programmer
I once got a programmer whose lack of understanding of English and lackluster programming turned a good Forex robot into a nightmare. I had to get a seasoned programmer to correct all the errors in coding. In getting a programmer, do not sacrifice quality for affordability. Use only a programmer that is willing to wait for payment until all tests are conducted and has the EA working to your expectations.
d) Testing and Debugging
This needs to be performed on a demo platform to ensure that the code is cleaned up and that there are no issues with the final product.
It is very obvious that the process of developing software that will earn you profits for the next 30 years of your trading life (assuming you are around for that long) is not an issue to be taken lightly. Forget about buying commercial products and take the time to develop a product that works for you. You can further monetize this product by selling the trading signals that you derive from it to cover for your production costs – if you want.