There are many ways to improve the performance of a forex robot which we will cover in this article. You may choose to implement these improvements into your own forex robots or where applicable into the commercial forex robots that you have purchased.
The forex broker that you choose to trade with can affect the performance of the forex robot depending on the trading conditions they have, primarily the spreads and slippage. For best results you want to use a ECN forex broker as they will typically have the lowest spreads and lots of liquidity for fast trade execution. Not only does this lower your trading costs but can also turn a losing forex robot into a winning forex robot especially if it is an automated scalping system. Some forex robots have maximum spread and maximum slippage filters included which is a must really as it will stop the forex robot from trading when spreads are too high and when there is too much slippage as these are both factors that will determine the success of each trade.
Dont let the forex robot trade over the weekend! Unless the forex robot is using a long term automated Forex trading strategy then you should ensure that it will not place any trades that could be left open over the weekend. Why? Because the market could gap AGAINST the entry and by pass the stop loss thus causing a big loss that you had no control over as the market was closed for the weekend. Some forex robots will exit positions before the market closes on Friday and start again on Monday whereas others will ensure there are no trades placed on Friday that may be open over the weekend. It is by far the safest option with short term forex robots NOT to trade weekends as it can lead to unexpected losses which is not the best thing to see on a Monday morning.
Trade once per bar. This is a simple feature to include in the forex robot that will make sure you do not get duplicate entries by entering on the same bar if conditions are met again and again. It will also stop the robot from getting into a “revenge” trade should there be a stop loss in one bar due to a spike from the news. You should also limit the open orders the forex robot can have at any one time to avoid using up all the free margin and getting stopped out. Both these factors help to control the forex robots overall risk.
Diversify by trading multiple currency pairs but ensure that you spread the risk accordingly over all the currency pairs that you are trading. If for example you wanted to use 4% total risk and were trading with the forex robot on 4 currency pairs then you would set each pair to trade 1% risk. You would not trade 4% risk on each as then your overall exposure would be 16%. Diversity is good as you can take advantage of how currency pairs correlate and when one may be losing you can make up for this by others winning. It can also increase the frequency of trades.
You can implement an ATR (Average True Range) forex indicator into the forex robot so that you only trade when there is a specific minimum or maximum range. If you are using a trend following forex robot then you could make sure the minimum ATR is above a set amount which would imply there is plenty of market movement but if using a range trading forex robot you could set it to only trade if the ATR is below a certain amount to ensure you do not get caught up in a trending market. Other indicators such as the ADX can also help to identify and filter range based and trending market conditions.
Have better traders discipline. Some forex robots get different results with different users. This is not just a coincidence but down to the user and the interference they have with the forex robot due to their emotions. Patience is required in trading and many users will give up too soon after having unrealistic expectations. Those who are patient and ride the wave through the good and bad times are evidently the ones who reap the rewards. Never use a forex robot how it is not meant to be used unless you have plenty of experience and have thoroughly tick or demo tested your idea. Inexperienced users should not play with settings are run forex robots on the wrong currency pairs and time frames. Use it how the developer intended for it to be used and always ask them should you not be sure if you are doing it correctly.
Finally, do not use any dangerous money management methods such as martingale systems to try and recover losses as this is dangerous and can blow your account. Also, never trade what you cannot afford to lose as trading manually or automated carries risk. Do you research and start demo trading first.