By now most forex traders know about the evolution of forex robots or should we say forex robot revolution? It seems like hardly a week goes by without a new forex robot coming to market and the hype seems to increase as each new product is introduced. If you are trading forex online and find yourself considering the purchase a forex robot there are a lot of factors to consider. Keep in mind that one of the big selling points of forex robots is that the user can simply download the software and walk away from his computer while the forex robot trades its way to big pips.
Sure, the autopilot feature that every forex robot boasts of is alluring for forex investors that can’t be at their computers during their preferred trading session to a job or other commitments. But no trader is in his right mind would buy a forex robot and just set it loose in his brokerage account without learning the robot’s ins and outs. One thing you need to know before buying a forex robot is what pairs it trades. This may not seem like a big deal, but it is because some forex robots only trade one pair while others trade several of the major pairs.
If you ever need to review what the major pairs are, there are plenty of forex courses online that will teach you not only the pairs, but approximate trading percentages for each as well. We’ll give you a quick refresher here of the eight major pairs. They are the Euro/U.S. Dollar (EUR/USD), U.S. Dollar/Japanese Yen (USD/JPY), British Pound/U.S. Dollar (GBP/USD), U.S. Dollar/Swiss Franc (USD/CHF), U.S. Dollar/Canadian Dollar (USD/CAD), Australian Dollar/U.S. Dollar (AUD/USD), New Zealand Dollar/U.S. Dollar (NZD/USD) and the Euro/Japanese Yen (EUR/JPY).
Now that we have that out of the way, let’s concentrate on trading forex online and if there are advantages to trading just one pair or multiple pairs. If you come across a forex robot that only trades one pair it’s probably EUR/USD and that makes sense since this is the most heavily traded forex pair. A multi-pair robot will trade all of the dollar-denominated major pairs with no emphasis on any particular pair.
The tough part about picking between single-pair and multi-pair forex robots is that there is no empirical evidence to suggest that one outperforms the other. If you’re comfortable using a forex robot that only trades one pair, that’s fine and that means a multi-pair robot won’t be of much use to you. On the other hand, you need to consider that while the forex market is the most liquid of all the world’s financial markets, and perhaps the most volatile, EVERY forex pair goes through lulls and periods of trading in tight ranges.
That can be a frustrating scenario for any trader and a losing proposition for forex robots that thrive on strongly trending markets. And where does a forex robot that only trades one pair turn during listless markets? Unfortunately, it has nowhere to turn, making the versatility of a multi-pair forex robot all the more alluring.
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