Trading robots: develop your own or buy the ready-to-use solution?

In recent years, the trading world has seen the emergence of automated trading systems or trading robots. These are a type of software program that allows traders to establish specific rules for entries and exits. All one needs are a computer, working internet connection and the software to start. 

Currently, there are several trading robots or automated trading platforms that are assisting traders to reap the profits from several different trading markets. Developers make these trading robots and promise huge returns. Some of them are transparent with the strategies they use, the developer’s background, as well as the price information.

However, in recent years, there has been an influx of frauds and scams that have started masquerading as legitimate trading robots or automated trading systems. They usually entice unsuspecting customers by making almost unrealistic claims and forged trading results. This is one of the reasons many traders have turned to programming and producing their own trading robots built according to their trading preferences. There are many platforms such as MetaTrader who offer traders the opportunity to program and build their own trading software. Alternatively, one can also develop them from scratch. 

Pros and Cons of creating your own trading robot

Pros

  • Personalized customization: Contrary to popular belief, almost every trader has his/her own set of preferences when it comes to trading practices and outlook. While some may prefer taking high risks, others can be conservative in their approach. The trader can take all these things into account when they design their own trading robot. They also may want to program a semi-automated or fully automated trading robot, depending on their financial goals and intent of trading. 
  • No lack of trust: Trust is a key factor when it comes to automated trading. There are many automated trading software out there which provide hazy or fraudulent background information to entice customers. There are other trading robots that promise huge gains but fail to deliver them when traders use them. There have also been instances where trading robots have misrepresented their trading strategy only for their clients to have their trading accounts emptied because of a risky approach. By programming their own trading robot, any trader can avoid this lack of trust that comes along with trusting a third-party software. 
  • Trading Results: Traders usually trial their trading software before they use it on real money. They can see the test results for themselves and carefully adjust the settings of the trading robot accordingly. Such is not always the case with the trading robots found in the market. While there are certainly legitimate trading robots that do provide authoritative proof, it’s not uncommon to encounter trading robots with fraudulent trading results. There are instances where traders trust these doctored or fudged trading results and invest in a robot that turns out to be unprofitable. 

Cons

  • Need solid trading and coding experience: To design and produce a successful trading robot, individuals need the knowledge of trading as well as coding. Simply developing an excellent trading strategy isn’t enough as one has to learn to be able to program it into the trading robot. Thus individuals lacking programming knowledge may find it very difficult. Even if one is a programmer, one needs to learn a new language, such as MQL5 in case one wants to develop a trading robot on MetaTrader. 
  • May require significant investments: Building one’s own trading robot may involve significant finances. In case one does not have knowledge of a programming language, he/she has to hire a freelance programmer, which may lead to a lot of expenses. When testing in real-time trading environments, traders may initially lose money in the process of perfecting the trading robot’s functions during the trial. All these can amount to significant costs that the trader must bear. 
  • Can never become profitable: Ultimately, investing in building a trading robot will incur expenses that almost always outweigh what the trader will earn in the long-run. Traders should thus plan their future expenditures as the robot would need several improvements and may lead to losses even after undergoing a long testing process. This is due to the changing nature of the market, which requires the robots to be adjusted frequently. 

Pros and Cons of buying a ready-to-use Expert Advisor algorithm

Pros

  • All the work is done before you invest: One of the biggest advantages of purchasing a readymade Expert Advisor program is that traders get access to an already fine-tuned, “ready to use” product. They no longer need to manually conduct technical analysis on the forex market to reap the benefits. Traders can choose from a wide variety of Expert Advisors, each catering to a particular style, market, or strategy or currency, providing endless opportunities to earn significant profits.
  • Trackable records with solid software providers: Reputed providers of Expert Advisors always display sufficient proof for the inner workings of their software on resources such as MyFxBook and FXBlue. This includes posting legitimate trading results from their accounts, past performance histories as well as background information on the developers. Many potential buyers of EA prefer it when they provide detailed information regarding the developer’s past market experience. All of these contribute to providing legitimacy to the product. 
  • Passive income with no coding or trading experience required: Using an Expert Advisor does not require the trader to be well versed in any programming language or have extended experience as a trader. In fact, the majority of Expert Advisor software cater to beginners or novice traders, allowing them to reach the levels of profitability that professional traders experience. Expert Advisor software also comes with regular updates and a customer care support system that can answer queries about any difficult topics that beginners may encounter. 

Cons

  • A lot of scams in the market: The success achieved by Expert Advisors over the past few years has undoubtedly attracted the attention of several fraudulent companies and scams. These fraudulent EAs often make outlandish claims about profitability levels, legitimate-looking websites, and other false information. In some cases, they also provide trading results that appear reliable but are either fudged, modified, or misrepresented in some way or the other.
    A good way to ensure that one chooses a legitimate Expert Advisors is to ensure whether they provide trading account details. MyFxBook and FXBlue sites ensure that the trading results they provide are legitimate as they perform regular checks and updates. 
  • Need to do careful research: Simply investing an EA is not a “one-stop” solution to achieve profitability in the forex market. Traders have to conduct due diligence and take a look at several factors before they make a well-informed decision about Expert Advisors. Apart from ensuring that the EA provides a live signal of their trading, one has to understand the risk parameters of each EA before choosing. They should consider how much they are willing to invest, what risk-reward they prefer, their withdrawal strategy, and how much the EA meets their trading goals before choosing a particular one. 

The Bottom Line

When choosing between building one’s own trading robot, or going for a “ready-made” expert advisors, traders have to consider the pros and cons of each. While there is plenty of room for customization when building your own robot, sometimes the expertise of professional forex traders does have an advantage in many situations. 

Today the forex space is filled with Expert Advisors, covering a range of trading strategies and markets, catering to a wide range of novice as well as experienced traders. Traders should conduct the necessary research and examine the track record of the EA and the team behind it before they make the final decision.