Forex robots vs Automated Forex – What’s the difference?

9 min read

Many people in the Forex trading market believe that Forex robots and Automated Forex trading are the same things. However, if you go into the details of these two concepts, you will be able to notice that there are many differences between these two.

In Forex trading, things can change very quickly. Because of this nature of Forex, in many cases, beginners are having a hard time understanding what to do and when to do it. Because of this, there are many beginner Forex traders who prefer to turn to trade automation to make their job a lot easier.

But, what is the difference between Forex robots and automated trading? While there are many similarities between these two, especially the aim of it – helping Forex traders in their ventures, they are fundamentally different.

Many people in the Forex trading market think that when talking about Forex robots and trading automation, people mean the same thing. However, this is not true. Forex robots, in most cases, refer to Expert Advisors, EAs, which are programs that can trade currency pairs for traders.

But, when you are using them, there is some type of involvement needed, such as changing the settings and adapting it to different trading strategies and so on. On the other hand, there is trading automation, which envisages using different types of things, such as MAM accounts, copy trading, and others.

When using the second method for auto trading, there is much less involvement from your side. But, there are many other differences between these two things that traders should be aware of. Follow our detailed guide to Forex robots compared to Automated Forex and learn everything you should know about it.

Main Reasons of Forex Robots & Automated Forex Difference

There are numerous things that make these two very different from one another. The main thing is that they are basically two completely different things. Forex robots are basically pieces of software that are being used by traders to automate the process of Forex trading.

On the other hand, there is automated Forex trading, which is a process of using different types of tools, such as copy trading, to fully automate Forex trading. While there is always some type of involvement needed to operate Forex robots, there is no need for traders to interfere when they are using copy trading.

Let’s discuss how some of these processes work and find out the main Forex robots and automated Forex differences that every trader should know.

Forex Expert Advisors

In the Forex trading market, Expert Advisors are the trading programs that are able to help traders analyze the market and trade Forex currency pairs in a safer and efficient way. In most cases, Forex Expert Advisors are used with trading platforms such as MetaTrader 4 and MetaTrader 5.

These trading platforms are considered to be the leaders in the market, and they are used by millions of traders every day. The majority of the Forex Expert Advisors are available on these trading platforms.

To get yourself an Expert Advisor, you have several options. The first thing that you can do is to find an Expert Advisor that was created by a professional software developer. While there are some free versions available, most Forex Expert Advisors will cost you a certain amount of money.

On the other hand, if you have enough coding skills, you can also create an Expert Advisor completely on your own. This way, the EA will be perfectly suited to your personal trading needs, which is a very important thing for many traders.

No matter which option you choose, using Forex EAs is a very popular thing in the Forex trading market. While some people use EAs to only analyze the market, there are many others who use Forex EAs to actually trade Forex.

However, to understand the main differences between Automated Forex and FX Robots, you should know automated Forex trading and Forex robots pros and cons really well.

Traders have some control

While Expert Advisors are intended to make the Forex trading market easier for traders, it is not something that totally takes away control from Forex traders. As much as it can help you to automate a huge part of the Forex trading market, you will still be required to be a member of the trading processes to some degree.

When you are using Forex EAs, most of them come with different types of pre-installed and determined settings. However, it is not that common for Forex traders to use the EAs with predetermined settings.

The reason for this is that every single trader in the market has different risk tolerance and they tend to prefer to change some of the details of the trading robots for more safety. Additionally, Forex trading robots can also be created by traders themselves, which is one of the biggest differences between Forex trading robots and Forex automation.

Whenever you are using Forex EAs, you always have some type of control over the positions that are being opened, which is not something that you have when you are using automated Forex. Let’s discuss what is automated Forex below and how it works.

Automated Forex

To better understand the differences between Forex robots vs Automated trading, traders are required to understand each of them really well. We have already talked about Forex robots, but what is automated Forex?

Automated Forex mainly focuses on automating every little aspect of the Forex trading market. By using Automated Forex, you do not have any control over the positions. There are numerous ways of trading automation, today, we are going to discuss the most popular ones – Forex MAM accounts and Copy Trading.

Forex MAM

In the world of Forex trading, MAM stands for Multi-Account Manager. It is a type of account that is run by a professional trader for beginners. This professional trader does everything for you. It analysis the market opens and closes positions, oversees the market for opportunities, and so on. Managed Accounts give clients the opportunity to basically have a portfolio manager that will do all the hard work. The accounts that run the other accounts are called Master Account.

In most cases, the Master Account is responsible for several regular Forex trading accounts. These accounts are working by combining the accounts of individual traders into a large pool of managed funds. All of the orders that are executed on the master trading account are reflected on every single associated MAM account according to the parameters that were set by the investors themselves. While using these types of accounts, there always is a certain amount of fee that you might have to pay.

The best thing about using these types of accounts is that it makes everything fully automated. Thus, there is nothing that retail traders have to do with anyone, all they have to do is to go on with their day and wait for their profits to increase.

So, when it comes to the question – What are the advantages of automated Forex trading vs manual trading? The simple answer is that automated trading makes everything a lot easier for Forex traders.

Copy Trading

Copy trading is another very popular way of trading automation that is used around the world. Much like MAM accounts, those who are using Copy Trading are able to fully automate the Forex trading market.

As a result, there is almost nothing that traders have to do. Much like MAM accounts, Copy Traders are connecting their accounts to professional traders’ accounts. As a result, the trading account follows everything done by a professional trader.

Without the need of doing any analysis or the actual trading activities, Copy Traders are able to make huge profits, which is something that many people enjoy in using Copy Trading.

So Which is Better? Forex Robots or Automated Forex?

Deciding which one is better, Forex Robots or Automated Forex trading should not be that hard for Forex traders. If you are someone who wants to simply make Forex trading easier but still maintain some type of control over their positions then you should go with Forex robots and Expert Advisors.

However, if you are someone who is looking for ways to fully automate their Forex trading endeavors, then the best thing to do is to use Automated Forex trading, which will make sure that there is nothing you should do in the Forex trading market.

FAQ on Forex Robots and Automated Forex

What are the advantages of automated Forex trading vs Forex robots?

The main advantage of Automated Forex trading over Forex robots is that it does everything automatically, which means that there is almost nothing that Forex traders have to do. This way, the traders are able to simply go on with their day and wait for the returns without having to do anything at all.

Is algorithmic trading better than manual trading?

It depends on numerous factors. If you are a professional trader and you know exactly what you are doing and you also enjoy the process of analyzing the market data and making decisions on your own, then manual trading might be a better choice for you.

However, if you believe that this is simply too much to do and you are looking for ways to somehow make the job easier for you then algorithmic trading might be a better choice for you.

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