You have probably heard more than once about trading in financial markets automatically using trading robots. As the cheerful song from the old Soviet film goes: “What progress has come to ... robots work hard, not people.” So what is a trading robot, can it be trusted to trade and can you earn a stable profit with it? I will try to answer these questions as clearly as possible.
By itself, a trading robot is not at all a complex technical device, reminiscent of R2D2 from a famous movie franchise, but just a program code that contains an algorithm of actions transmitted to a trading terminal (in which, in fact, this program code is installed). The algorithm of actions of a trading robot is, in fact, a trader's trading system, which he translates into a language understandable to a computer.
So, a trading robot is a symbiosis of a trading terminal, an algorithm program and a computer on which the whole thing is installed. But usually the algorithm program itself is called a trading robot. Also learn more about trading bot for kucoin.
Recently, the practice of installing a trading robot not on your work computer (which for some traders is also a common home computer) has become widespread, but on special dedicated virtual servers - VPS (Virtual Private Server).
A trader rents a VPS server and installs a trading terminal on it along with a robot connected to it. After that, he may not worry that the correct operation of his trading system (implemented by the algorithm of the trading robot) will be violated by an Internet connection failure or a banal power outage. This is especially true for traders who do not live in large metropolitan areas, but in the outback.
A considerable plus is the fact that installing a terminal with a robot on a separate hosting allows you to offload your own computer. After that, you can not be afraid that the wife, child or cat will accidentally press the “wrong button” while the unlucky merchant leaves, for example, to drink coffee in the kitchen.
By renting such a server and installing on it a trading terminal with a password to access your trading account, as well as a trading robot with its own exclusive trading system, the trader thereby entrusts all this information to the hosting provider. Therefore, it is necessary to choose hosting with special care, focusing on its reputation and reliability, and not buying into the generous and tempting offers of all sorts of cunning and scoundrels (of which, unfortunately, there are many in this area).
Renting such a server can cost from several hundred to several thousand rubles a month. It all depends on the level of service and reliability that the hosting provider from which the VPS can be rented can provide.
To the question of whether it is possible to trust a trading robot with your hard-earned money, the answer will be ambiguous. On the one hand, the answer is: yes, but why are these very robots still being created? But on the other hand, as they say: trust, but verify. It is necessary to check even your own written trading robots (by running them in the strategy tester), not to mention those trading robots that you download or buy.
Any trading robot must be run in the strategy tester at different time intervals with different input parameters, etc. This is done in order not to receive an unpleasant surprise later in the form of a huge drawdown or even a complete drain of the deposit.
Is it possible to earn stable profits with automatic trading? Yes, you can, but under certain conditions. It is necessary to understand that a completely universal (successfully trading under any market conditions) trading robot has not yet been created (it would be the so-called Grail). That is, the trader himself must decide which trading robot to throw into battle under certain conditions prevailing in the market. Those. Alas, it will not work to completely get rid of the process and make trading completely automatic (at least at this stage of technical development). But the competent use of trading robots, nevertheless, allows many traders to receive stable profits.
As a summary to all of the above, let's look at the main pros and cons inherent in trading robots.
Let's start with the cons:
Let's end with the positives: