Such systems require constant tweaking and human supervision. The real question is: do these FX robots work and how do they go about making decisions in your stead? EAs use an endless variety of technical indicators and custom scripts to derive trading signals and to act on them. Anyone can code EAs directly through the trading platform. There is a vibrant market place where traders and programmers buy and sell the best performing EAs. Top forex robots are well capable of scanning an ungodly amount of charts. Through the technical indicators they use, they then find trading opportunities.

Once it identifies such an opportunity, the robot can recommend it to the trader. It may also act on it, opening a position according to a set of preprogrammed parameters. Experience has shown that automated trading only really works within a tight range. Also, the presence of a well defined trend is a major plus.

Auto trading profits generally only amount to a few pips. Provided the conditions are right, forex scalping robots can be quite successful. Because of these shortcomings however, large price swings can wipe out all profits in a heartbeat. It is by no means easy or simple to create forex robots that work. Programmers pour countless hours and tons of effort into building such a piece of software. The sheer number of variables it has to juggle makes it clear that this is no simple exercise.

With that in mind, the very idea of a free trading robot that works, quickly becomes implausible.

That said, the actual efficiency of a working forex robot is quite unimpressive. Furthermore, authorities consider such automated traders to be unreliable novelties at best and scams at worst. That is probably the reason why you will not find a serious FX publication promoting forex robots.

The forex robots industry itself is not conducive to trust.

Forex Robot Signals

The peddlers of various trading bots do their best to discredit their competitors. It is a bit of a Wild West out there, and the winners are seldom the traders who purchase forex robots. Your best bet to find a working forex robot is therefore to pore through feedback provided by actual users. Make sure that you are dealing with genuine feedback. Forex robot creators have an uncanny knack for faking user reviews. Genuine forex robots always require a great deal of user input. What that means is that the ideal user is far from being a clueless beginner. The bot is only supposed to take the repetitive workload off the shoulders of the user.

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You then have to be able to set your FX robot to properly execute your vision. Shutting it down altogether and devising a radically different approach is also often warranted.

No one will sell you a forex robot capable of racking up untold profits on autopilot, for a handful of bucks. The bottom line: do not expect much of your robot and know that you will have to do a lot of work even while auto trading. Steer clear of free forex robots. The same goes for all deals which are too good to be true.

The advantages of forex robots are clear. FX robots take the mechanical work out of the forex trading equation. They cannot however help you any further.

They cannot come up with strategies of their own and therefore they cannot adapt to changing market conditions. Should the results be very much different, it is a good reason to reconsider the need for such trading robot. The majority of trading robots are developed so as to trade on one particular symbol and some of them even require to be used on a specific time frame.

It appears to be quite reasonable as every instrument behaves in its own way. Therefore, symbol and time frame are, as a rule, always specified in the description of a trading robot offered on MQL5 Market. First, you need to make sure that the Expert Advisor is not going to crash with a critical error or fill the log with trade error messages, being used in inappropriate starting conditions. Second, check that a profitable trading strategy has not become extremely loss-making, due to the above changes in the settings - this can happen where curve fitting had taken place.

One of the easiest ways to arrange that kind of test for the Expert Advisor is to optimize it over all symbols selected in Market Watch. We run the optimization of the Expert Advisor in that mode on a quite long time frame H1 with "Every tick" generation and get a fairly quick answer to the second question. Results of such optimization show that the strategy has a right to exist, demonstrating statistically sufficient number of trades on each symbol without yielding really bad results. Mind you, we have tested one strategy on all 13 symbols in Market Watch with the same parameters set by default.

We can certainly not expect that every Expert Advisor would work equally well on any symbol and time frame. Yet it is worth checking it in the Strategy Tester using this method. It will not only reveal possible code errors but can even give new ideas. No obvious code errors have been detected during testing. But what if this is not a consistent pattern and this behavior is due to the testing interval selected from To look into this question, we test the Expert Advisor with the same parameters over , taking We run the test and see the results.

The Expert Advisor is no longer profitable and has immediately become much less wowable. Moreover, losses suffered in significantly exceed profits demonstrated in the Strategy Tester over Conclusion: the Three Moving Averages Expert Advisor requires further development to ensure proper automatic response to changes in the market behavior, or else the right parameters for every interval have to be found through optimization. When giving descriptions, developers of trading robots try to show their products at their best and therefore provide reports and test charts with optimum parameters for a particular interval.

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Since considerable time has usually passed from the date of publishing the trading robot till the date when you get interested in it, we can run a so-called forward test. Forward testing is testing over a period of history that was not considered when selecting optimum parameters. The end date is set at So, following the test run over the period from In our case, the results demonstrated by the Three Moving Averages Expert Advisor over the additional short interval Forward are even better than those achieved over the preceding 10 months. This is however very rare.

Forward testing is used to assess stability of the trading system in the changing market behavior. Optimization of parameters in the Strategy Tester allows us to get the parameters at which the trading robot is at its best on historical data within a certain interval. But this does not guarantee that the obtained parameters will be the same best fit even when used for trading in the nearest future.

Traders who develop automated trading systems often confuse such concepts as optimization and curve fitting. The line between a fair optimization and curve fitting is very thin and hard to find. This is where forward testing has proved useful allowing to objectively assess the obtained parameters. Upon optimization in the MetaTrader 5 Strategy Tester, you can choose to forward test the resulting optimum parameters and set the necessary limits. Let us run forward testing of our trading robot with the settings as shown below. Specify the parameters to be optimized - we will select those that are supposed to have impact on the trading logic.

Therefore, we will not optimize parameters in charge of money management. The above combination of the step, as well as start and stop values has resulted in nearly 5 million passes.

How to Make a Trading Robot in No Time

Under the given circumstances, it is not unreasonable to use genetic algorithm and involve MQL5 Cloud Network in the optimization. So, let us take a look at the results of the optimization including forward passes that has taken a total of 21 minutes and cost 0. At first glance, there seems to be something wrong with it. We check the results and see that the values of the first three optimized parameters are the same throughout all passes. Let us check both assumptions by re-optimizing with the same settings and input parameters.

This time, the chart of forward testing results looks a little different. As a result of the optimization we can now see three mainstreams. This means that the last two optimized parameters still appear incidental to the given trading robot. Let us make one last attempt and remove unnecessary parameters from the optimization. We now only have passes.

Therefore, complete parameter search would make more sense, rather than genetic optimization. MQL5 Cloud Network will in this case provide us with more agents and the time required to complete the process will as a result be significantly reduced. The task has been completed in 7 minutes with cloud agents involved and the forward testing chart looks good. It looks somewhat hopeful but it does not mean that the resulting parameter sets will also prove profitable in the future. We have had a chance to see that not all strategy parameters available for setting up a trading robot are equally significant and able to affect trading results.

However, it is more common to come across a trading robot that has a great number of parameter settings. Numerous parameters allow you to make very accurate settings for a trading robot so as to fit its performance to a certain period of history which is highly likely to be revealed during optimization. Curve fitting means that the Expert Advisor will probably not show the same level of profitability on data beyond the specified interval used for the optimization as it did on the test data.

And worse yet, it may yield quite the opposite results, leading to losses. It is believed that the less parameter settings a trading system has, the lower the possibility that the identified pattern will vanish in the future. And vice versa - the more parameters in the system, the lower the possibility that the market will keep its characteristics in line with such a fine-tuned Expert Advisor. As a proof of the above, we strongly recommend that you familiarize yourself with the results of the trade analysis provided in the article Optimization VS Reality: Evidence from ATC which we will turn to further below.

The chart displays trade results of the participants over the Automated Trading Championship Vertical axis shows the account balance as at the end of the Championship and horizontal axis displays the number of EA's external parameters. Expert Advisors are represented by red diamonds.

It can clearly be seen that the Expert Advisors with a great number of parameters lost money or, at the best, broke even, when trading over the forward period of the Championship. The absence of external parameters in a trading robot offered for sale does not say anything about the generality of designed-in trading rules either and cannot be taken as coolness.