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Trading forex with forex robot software can be a great way to earn income on autopilot, but only if you set it up correctly from the beginning. If you get the configurations wrong, it can just as effortlessly lose money for you. Forex robot software can also be called an expert advisor, or automated forex trading system The forex robot software will no doubt include default settings. These may perform well but you'll want to test them by running a demo account at the start. Additionally , you will want to create your own personal trading plan. This really is fairly simple but it needs to be created exclusively for you. Here is what you need to include in your Trading Plan: 1. Position Your position is the quantity of lots that you will take on a particular trade. The forex robot software default settings will most likely assume that you want one lot per trade, but from time to time you would run into forex software that has a sliding range of advised trades in line with the strength of the trade signals or depending on which system is being used, if the forex trading robot operates more than one process. If so you need to take the largest number of lots and use that as your basis for calculating risk. Risk will probably fluctuate based on risk appetite. In forex trading I usually recommend a risk level of 2-4%. This means that no more than 2-4% of capital will be risked on any single trade. So if a forex trader has a $5000 account, and wanted to work with a more conservative 2% risk management level, then he or she couldn't risk more than 2% of his $5000 per trade. That would be $100 he could risk per trade. 2. Stop loss level The setting for the stop loss could be the chief element determining risk. In theory the stop will kick in and close your trade anytime the price goes against you to a predetermined amount. From time to time, as a consequence of slippage, you will not get that exact price so it is possible that you might sometimes lose a few pips more than the amount of the stop loss. Often it is best to make use of the recommended stop loss level preprogrammed in your forex robot software. If you ever alter this, you might find you do not get the expected gains because either the stop is activated too soon and too often or losses are greater than they ought to be. So if the stop loss is placed at a level that could involve you in a risk greater than 2% to 4% per trade, lessen the position size, which might mean switching to a mini account from standard or to a micro account from mini. 3. Profit level The forex trading robot will also automatically exit the market at a predetermined level on a successful trade. Once again, the automated forex trading software will come preloaded with a default setting which the programmers have usually tested and determined to be the most beneficial. You are able to analyze this for yourself if you'd like. If the forex robot software trades with a few different currency pairs, you might find that the limit order has been set at the same point for all of them, i.e. they will all close at the same number of pips profit. In cases like this it could be advantageous tp perform some back tests, because this suggests that the programmers have not run optimization procedures for all of the currency pairs that the FX expert advisor can trade with.
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