8 Disadvantages of Trading Using Robots
8 Disadvantages of Trading Using Robots – In trading most people do it using robots. Robots are used to be able to automatically play and make profits in a fast way. However, did you know that trading using robots can also be detrimental? Here are the disadvantages of trading robots
#1. Expensive Cost
Because it is an automated system, forex robots are usually expensive to build. Forex robots are structured in a metatrader language, which only a few traders can build. But the expensive costs that must be incurred are not only when buying a robot.
There are other costs involved if you want to trade forex using a robot. Because everything is completely automated, traders obviously need a reliable 24 hour internet to be able to trade automatically. Likewise with the computer specs used, must be high and that means expensive.
#2. Must Always Update
It doesn’t matter how good a strategy is applied to a forex robot, a trader cannot avoid the fact that the forex market is constantly changing. On the one hand, forex robots are hard-wired and rigid systems that traders should always take the time to update.
For example, the forex robot is not updated, the robot cannot work so trading will most likely end in failure. So even if you use a forex robot, try to choose the type of robot that can be updated so that the trading strategy can be adapted to the market situation.
#3. Higher Risk
The majority of forex robots are made with the main goal of maximizing the profits that can be obtained from trading without having to involve traders. But robots are actually generated from various combinations of high-risk trading strategies such as martingale, scalping, and hedging.
This strategy has proven to be effective in generating extraordinary amounts of profit from correlation forex trading, as well as the risks it presents. As an illustration, the strategy used to build a forex robot is usually not equipped with a stop-loss order.
Also Read : Easy Way of Technical Analysis in Trading
#4. Data Bias
One of the hidden enemies of forex traders is data bias. This situation refers to the backtesting process carried out to test forex robots. In general, backtesting results will show excellent results but show failed performance when used for trading.
This situation can occur because of the data used for backtesting forex robots. Robot sellers usually use data that matches the robot, not market data for the current period. The result is that forex robots are sometimes irrelevant to the current market situation.
#5. Scam
The logic is, if the forex robot shows outstanding performance and gives high profits, why should it be sold? One-sidedly it can be concluded that there are conditions that do not make sense. This is what traders must understand if they want to trade forex using robots.
For example, finding a trader who sells a forex robot with the lure of big profits, you can be sure that the forex robot is a scam. Avoid traders or other forex robot providers if you encounter an anomaly like this.
#6. Less Safe
Forex robots are automated software that has been created in such a way that trading can be done automatically. Although this is an advantage, it can also be called a weakness. The reason, the software could have been given some kind of virus or other.
A condition that is very likely to be experienced by traders is that they often suffer from losses, even if they win, only a small amount of profit can be taken. The possibility of profit is usually taken by the virus and then sent to the owner of the virus. Therefore, make sure that the robot is completely safe from viruses and malware.
#7. Quality Must Be Maintained
In addition to some of the advantages provided by trading robots, traders also have the potential to regularly get into trouble if trading forex using robots. Traders should always keep the EA in high quality, or the trade will end up disappointing for the trader.
Forex robots do not have the ability to deal with errors or other unexpected events, so traders are required to monitor continuously in order to maintain the quality of the performance displayed. So, even though they have used forex robots, traders also cannot just walk away and relax.
#8. Limited Strategy
Some types of trading strategies sometimes cannot be applied to forex robots. The results of pattern and wave analysis from charts, including fundamental analysis, are very difficult to enter into trading parameters mathematically into the trading platform.
In the current stage of developing artificial intelligence technology, this task still cannot be carried out by robot traders. Basically, forex robots only do what they have been told without being able to improvise on market conditions.