Today I want to talk to you about trading robots.
In commerce, it takes cape any trading method, especially trading with a robot that is emotionless and performs everything assigned to it with the precision of a tick.
Robots have a lot of pros and cons, let’s find out everything in order.
Any program is capable of monitoring more tools than a person. In addition, the program easily performs dozens of calculations and can analyze the market and make a deal in a matter of seconds, which the human brain simply cannot do.
A trader cannot learn hundreds of strategies and rules and use them simultaneously in the market, trading manually. On the other hand, the program is capable of safely using complex systems.
If the code is written correctly, if the strategy is well chosen, the robot will follow the rules precisely. An ordinary trader can choose the wrong tool, mix up the numbers, put a comma in the wrong place, the robot is absolutely accurate in their Actions.
Fatigue and scalability.
Any trader needs to rest, no one can sit at the monitor and constantly trade correctly. Unlike a human, a robot just doesn’t get tired. You can work all day, seven days a week and don’t ask for time off. If you use a robot, you can be free all day and take care of their matters while the robot does all the work for you without fatigue.
If a person finds a new strategy, he will need time to study it. And even after spending time studying, there is no guarantee that a person will understand everything that he studied the first time. But the robot will be taught easily, just write a line of code, and it will do everything, without errors, from the first time and you can add everything you want and almost anything.
The robot is not subject to emotions.
Perhaps the biggest problem of a trader is emotions. Every trader, especially a beginner, experienced strong emotions when he lost or when he won. It will not be possible to correct its psychology and get rid of emotions in a second, but fortunately, the robot does not have such problems. The core of the robot is based on clear rules, the robot simply does not know how to deviate from them, and the robot does not know emotions. The robot doesn’t care how many losing trades there were before or there will be after, all it knows are the rules and it sticks to them.
It is not easy to create a robot, but everyone can do it if they put enough effort and spend time.
The complexity of making a robot (writing a program).
Everyone can create a profitable trading strategy, but not everyone knows how to program and create robots. If you can code, you may have to learn a new programming language.
There is an opportunity to buy a ready-made robot or order a robot to be written to you. In the first case, you will not know what is hidden in the black box, you will not be able to configure it. In the second case, there is no guarantee that the programmer will understand his idea and do everything right.
The trading robot can only use technical analysis.
A trader can read the news and understand the meaning behind the lines. The trader knows how to understand, but the robot does not. The robot only understands dry figures and therefore uses technical analysis perfectly, but cannot go beyond these limits.
Also, there will be situations where see clearly a stage and the robot just doesn’t see . At the same time, it is impossible to stop trading the robot if it is profitable from a distance. The only thing that can be done is to analyze this situation and, if necessary, make changes to the algorithm, while it is being carried out. cape the whole test process again.
A trading robot cannot make decisions in non-standard situations.
It only fulfills the logic inherent to it, and in case of problems it will not be able to change anything.
Of course, the program can include the robot’s reaction to some situations, but it is impossible to foresee everything. For example, if the Internet connection is lost, the robot will not be able to continue trading or at least close an open position. A trader trading manually, in this case, would call the broker and close the position, or restore the internet. The computer may freeze, the program may close with an error, the broker may not accept the application or accept it, but with a long delay. The trading robot will not be able to react to all events and this may lead to unplanned losses.
The lack of emotions, one of the advantages of a trading robot, is also a drawback.
The robot can drain your entire capital in one day without any embarrassment. This must be taken into account when creating a robot. For example, allow the robot to trade only a portion of your capital, or make it so that when a certain threshold is reached, the robot notifies you and (or) stops trading.
Concluding the consideration of the pros and cons of using trading robots, I want to say that the negative sides can be largely offset by a professional approach to creating a robot whose algorithm will take into account actions in non-standard situations. But at the same time, of course, there is no escape from the complexity factor in the process of creating robots, this is the main deterrent, which can only be overcome by spending considerable time mastering programming.
Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I’ll be happy