Trading Robots

• There are no perfect robots, moneymakers that can guarantee the steady income with no respect to current market conditions. It just can’t be like that. Robots can make forecasts and perform superficial analysis with several criteria; however none of them can predict price changes (on the developed markets). The prices are constantly changing and there’s no such algorithm that is able to take all the factors into account and create a precise pattern of behavior. Thus, all the offers of smart robots with complex AI that can predict prices with more then 60% accuracy are nothing but a marketing trick. There are robots with optimized strategies, which were tested and well-proven on the past data; however, there’s no guarantee that such bots will be successful in the nearest future.
• The whole concept of artificial intelligence is terribly misunderstood. Beginners consider trading robots as incredibly complex software solutions, which are capable to perform thorough fundamental analysis of the market conditions and correctly predict the price more often than a group of live traders. Wrong. Some robots can work in accordance with incredibly complex strategies, analyse huge amounts of data, may imitate the learning process; however, there is no guarantee that forecasting will be profitable. There’s no sense in making an artificial intelligence that will copy behavior of a real trader. Simply because live traders are not perfect in what they are doing. There’s an amazing book of Nassim Nicholas Taleb about luck, uncertainty and probability. It’s called “Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets”.
• Some traders believe that trading bots are too complex, trading strategies are difficult to understand, plus they require constant control from the trader. It’s not really like that in the majority of situations. Trading robots help to automate routine operations, such as price monitoring or order placement. If trader follows some working strategy, the latter can be automated and reduce the number of routine operations and possible human-factor mistakes. However, if trader has no strategy, it is strongly advised not to use any bots! The sure way to lose a deposit is to trade with a bot that uses some complicated or secret strategy that trader doesn’t understand. Even if developers guarantee steady profits and demonstrate significant results.

• Trading robots are able to monitor prices, buy and sell assets in an interruptible manner. Unlike live traders, trading robots do not require breaks/pauses, because they can’t get tired. Any trader will become tired during continuous work, while a robot can work as long as required. Programs don’t have physical needs, they don’t sleep.
• Trading robots are stable and fast. If the trader needs some time to take a decision and enter the data to place an order (the quantity of assets and the selling\purchasing prices), the robot will do that in a split-second.
• Trading robots are emotionless. The trader may have doubts or be scared to lose money, thus making affected decisions and totally forgetting about the current trading strategy or money management practices. Constant stress can also be the reason of many trading mistakes. The robot has no emotions, it simply follows the algorithm, strictly observing all the rules.
• Robots can’t make a typo (incorrect entry of correct data). The trader can be tired or annoyed and enter a wrong amount or just make a mistake (especially in case with numbers, e.g. 0.0000021 and 0.00000021). The robot can’t make such mistake, because it’s against the basic algorithm.
• Robots are versatile. One can use a robot on many exchanges at the very same time. It’s pretty tiring for a trader, especially in case when several orders have to be executed one by one. Furthermore, several robots can follow different strategies and work simultaneously.

Trading robots can make the life of a trader much easier, allowing automating many routine operations, increasing the speed of work, reducing error rates and fatigue. However, development of an effective trading strategy is the task of the trader and not the robot. It’s like a car that allows driving faster and more comfortable, but it is up for the driver to decide how to get to the destination. And most important, it is the driver who is responsible for all actions.