| There are thousands of different commercially | | | | range of the previous Asian trading session which is |
| available Forex Robots on the market at the | | | | usually typified by lower trading volumes and shorter |
| moment, but what types of robots are out there | | | | price ranges |
| and what types of strategies do they use? If you | | | | 3. Grid Trading Robots: The grid trading strategy first |
| have a good grounding of the fundamental strategy | | | | became popular amongst automated forex traders |
| used by the robot you can begin to understand how | | | | 4-5 years ago and rapidly developed a hard core |
| best to use the robot and use it profitably. | | | | following amongst automated forex traders. They |
| Forex Trading Robots come in all shapes and sizes | | | | basically rely on price action rather than any technical |
| and can use any type of strategy to initiate and exit | | | | analysis indicators, and set up a series of closely |
| trades. Typically they use some type of mechanical | | | | separated trades or "grid" on either side, above and |
| or neural networking algorithm to perform this task. | | | | below the current price. The theory being that no |
| Whether it be in the form of a technical analysis | | | | matter what happens with price the robot will collect |
| indicator such as MACD or simply using a price level | | | | relatively small but numerous trades. Usually there are |
| to enter and exit trades. | | | | large volumes of trades open at any one time so |
| I have identified 5 broad types of Robots and give a | | | | that factors such as margin and money management |
| general description of the type of logic and functions | | | | can become critical after large moves in price action. |
| involved in these types of robots, without getting | | | | Grid trading is still a popular form of trading in retail |
| too scientific and entering the realm of rocket | | | | forex, especially with the advent of Metatrader and |
| science. I am sure that there are many other types | | | | micro accounts. |
| of Robots using a host of other methodologies, most | | | | 4. Scalping/Range Trading: Usually look to trade the |
| of which are so called "black boxes" where the exact | | | | less volatile currency pairs, such as EURCHF and |
| methods are not made public and cannot easily be | | | | EURGBP during the less volatile (Asian) session. usually |
| reverse engineered. | | | | typified by a large volume of trades, whilst looking |
| | | | for relatively small and frequent gains. This is also a |
| 1. Trend Trading Forex Robots: These robots look to | | | | very popular method for Forex Robots but probably |
| identify an existing trend or change in trend or | | | | best to check with your broker to see if they |
| counter trend, by using any number of mechanical | | | | accept this type of trading strategy. |
| indicators or neural networking algorithms to trigger | | | | 5. News Trading Robots: Various methods are used |
| trade entry and or exit. This probably accounts for | | | | to trade the fundamental news events, some are |
| the vast majority of forex robots. If you can | | | | triggered by the specific news data release, other |
| successfully identify a trend and exit at an | | | | use some form of pattern or price action to initiate a |
| appropriate time then you may well have the | | | | trade. These types of robots are extremely time |
| beginnings of a trading system. | | | | sensative because of the relatively short period of |
| 2. Breakout Trading Forex Robots: Usually look to | | | | time and large movements. Your brokers trade |
| trade at the start of a trading session, with the | | | | execution and slippage can be critical. This form of |
| London opening session usually being the most | | | | trading seems to increase and decrease in popularity |
| productive to trade. This type of robot looks to | | | | with the market volatility as the effect of |
| trigger a trade once the price breaks out of the | | | | fundamental news releases changes. |