There is a great debate as to which is better at trading Forex, a human or an automated Forex system. Each side of the debate can cite examples of the benefit of their own approach. The human trader can of course be more flexible in their trading method than a preset mechanical system. However they can’t execute positions as accurately or as regularly as an automated system. Neither can they overcome the most quoted benefit of Forex robots which is their ability to remove the psychological limitations which will impact most human traders’ results.

Automated Forex trading systems have been hailed as one of the greatest discoveries of recent years. Developments in computer technology have allowed ever more advanced systems to be developed. These are capable of replicating a strategy with absolute timing and precision. In addition the speed with which a Forex robot is capable of calculating market entries and dealing with a broker  is beyond doubt. So too is their ability to ensure that no opportunity is missed. Unlike a human they can trade around the clock.

However the Forex markets are a fluid and ever changing entity.  This makes it difficult for even the best Forex traders to register consistent gains. They don’t always form pattern in a repeatable way and often their  dynamics alter over time. This is why many Forex robots are brought to market with short live trading records. Their only promise of longer term gains coming form curve fitted back tests. As a consequence they often only perform well for a short time period when first launched. Their performance over a longer period of time will then quickly drop away.

This aside, the other common benefit attributed to the use of Forex robots, that they inhibit emotional trading, can also be called into question. For automated Forex robot based systems to work it needs to remain exactly that. Yet traders will still be tempted to tinker and adjust parameters, open trading positions outside of the strategy and over leverage their accounts.

So is there any point in trying to develop a mechanical strategy in the first place? Many critics would argue no. However most of these robots have basis in technical analysis methods. Therefore in supporting this view you would be discrediting the very validity of technical analysis itself. As with all forms of trading there are merits and approaches that can be taken from both sides.

As automated trading systems are able to spot technical trading entries with great speed and precision. then maybe they should be used for this primary purpose only. The human trader can then monitor and follow these signals. They can also provide logic and reason to the trading. In this way the Forex robot and human traders’ approach can have a synergy. By combining the strengths of both it should be possible to move closer to optimum trading performance.