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Do robots work? Yes they do. Are robots useful? Well they can be. Are robots profitable? Well they can be, but mostly no.
Ill take the profitability first.
A lot of robots are hardly profitable simply because they are extremely strict with the rules. This is supposed to be a good thing but it tends to work out the other way. One main reason for this is that if a robot and a human are given the same rules to trade, the robot will never apply discretion while the human can.
If anyone has a trading system that is absolutely rule based ( ie without discretion) then a robot would be the best option and if that system works, then that robot will also work. Most systems however are not so. Most traders trade something similar to what they say their system is and not really what their system is.
It then follows that most robots fail not really because of themselves but because of the sytems they are programmed to follow.
Next you may have a profitable system but certain circumstances may not allow your robot to function properly. For instance you have a scalping system where you go for 10pips per signal,and the exact point of entry is important. If your broker gives a lot of slippage, it will be difficult for you NOT to loose money. Some robots work well with some brokers and not with others. Trading on a demo server is quite different from trading on a live server.
If we take a simple ma cross as an example, the rules are simple. Buy when the fast ma crosses up, and sell when it crosses down. Exit by take profit, stoploss or an opposite cross of the ma.
The robot will work according to the rules but it may or may not be profitable.
There are too many variances in the market and in life for us to be sure that the robot will be profitable.
As for the usefulness of a robot, it depends on what task you assign for it.
I prefer to use custom indicators to display my own systems (when I get some really crazy ideas) and when I get my alert that there is a trade (ie my conditions have been met) then I decide whether or not to make the trade, taking into consideration many things that would not have occured to me when coding the ea. Id rather code a robot to handle my opened orders, eg trailing stop, takeprofit , breakeven and general money management while I open the position manually.
One thing humans have over robots is the ability to adapt when the market changes. Robots cant do this except the neurotic (oops) I meant the neural ones (or so they say). By the time you realise you need to revise your robot, you might also be simultaneously realising that you need to re-fund your trading account.
Conclusion.
Robots work.
Robots can be useful. A robot can do practically anything you can do as a trader and even faster than you or I. Buy, sell, trailing stops, stoploss, takeprofit,analyse the market, draw objects on your charts, whatever you want it to do it will. It can work with any kind of strategy you can think of (provided it doesnt violate your brokers rules)
For now, I will only let a robot manage my positions for me (not trade for me) till I find a system that even a child can profit from.
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