If you are new to forex trading, also known as foreign exchange trading, it may feel daunting to do it all on your own. There are a few ways that you can receive help at the trading market, and below we will briefly discuss a couple of them.
Let’s start with the option that at face-value seems like the easiest option for traders, namely forex robots. However, this alternative is quite the contrary. Though forex robots engage in automated trading, there is very little that they are able to automatically do.
Automated trading with forex robots work with specialized software to send you signals on trading opportunities based on mathematical and technical algorithms. Some robots are also able to act on these signals, hence engaging in automated trading. However, the range within which the robot can analyze, and signals, must be pre-programmed by the trader. Additionally, it needs to be narrow and properly analyzed in order to be profitable. The robot cannot invent strategies on its own.
If the forex robots are simply left to themselves, they are likely to misguide their trader in several ways. For example, they can rely on false reviews and act on general trends, which are volatile and may cause large price swings that may be detrimental to the trader. Therefore, this option should only be used by experienced and well-versed forex traders, and even then, be used with caution.
How to avoid robot scams
To avoid getting scammed, a rule of thumb includes never using a free forex robot. It would not make sense for the seller to give out an automated product which is computed to generate large sums of profit for free. Another rule is to not trust a robot that claims to be self-running and profitable in the long run, as the volatility of the market prevents such guarantees.
A safer and more reliable option is that of forex brokers. Brokers help you much in the same way that a real estate agent would: through personal expertise and knowledge of the market. On that basis they check the market for trading opportunities for your needs and advise on the amounts and how best to invest.
When choosing a forex broker there are several qualities to pay attention to. The most obvious is the cost. Make sure to check for “hidden fees” for things such as withdrawal or inactivity, and check whether the fees are clumped or paid separately. Sometimes different brokers will offer the same service for different prices, which is when it is most important to check these fine scripts.
The next thing to look for is whether they are offering the type of strategies that you are interested in using. Some brokers will only offer limited services, and some do not offer strategies such as scalping or hedging at all. If you are interested in these strategies specifically, this detail is worth paying attention to.