Markets are getting more and more treacherous as so much more money and so many more traders are being poured into them day by day. As markets have grown so exponentially, so has the difficulty with which trading ought to be executed. This level of difficulty and complexity can be quite daunting for many traders who may not be able to maneuver through the turbulent waters of the forex market or other financial markets. As a result, many traders might turn to automated solutions for facilitating and simplifying this process. MT4-MT5 bots are among the most popular solutions. But there are both free and paid forex robots available, and it might be a difficult choice in and of itself to pick between these two. Hence, in this article we are going to delve deep into this topic and talk about the pros and cons of free versus paid Forex Bots.
What are MT4 or MT5 bots?
In simple terms, an MT4-MT5 bots can be referred to as any automated trading solution and tool that is compatible with the trading platform MetaTrader 5 or MetaTrader 4. As you know the family of MetaTrader trading platforms are the most popular platforms in this domain. MT4-MT5 allows users to trade in markets such as the foreign exchange market, the commodities market, the stock market, and even the cryptocurrencies.
Furthermore, it is noteworthy to mention that the automated trading tools or bots that are compatible with MT4 or MT4 are also known as expert advisors.
Why use MT4 and MT5 bots?
There are many reasons why traders might opt to use forex bots over manual trading, among them we can refer to the following significant reasons. First and foremost, a forex bot is able to trade nonstop and around the clock. This is simply not possible with a human trader as we need to rest and sleep.
But in the market opportunities don’t take a break and neither should your trading process. This is why with the help of forex bots traders can take advantage of these opportunities at all times and never worry about missing out on them.
Secondly, forex trading bots are able to trade with a rigorous level of discipline that never wavers or diminishes no matter what, because the trading process is carried out based on an algorithm. Naturally, this is not possible with a human trader who is at the mercy of his own emotions and other mental biases.
Last but definitely not least, the trading bots that are compatible with MetaTrader 4 or MetaTrader 5 allow for the process of backtesting which is also carried out in these platforms as well. The process of backtesting will allow you to test out the entire trading bot against historical market data and then adjust its configuration to fine-tune your trading bot in the best way possible.
The difference between free and paid forex robots
Whether a trader decides to use free forex robots or paid ones will ultimately depend on his own decision. This is tied to various factors that include the expertise level of the trader and also the trading goals that he has in mind, not to mention the amount of budget that he has available for this purpose.
Most of the free bots are available in the trading communities across various platforms, such as the big community of traders in the platform of TradingView or any other community based trading platform. Such tools and solutions are usually recommended by one trader to another. While there are considerations that ought to be taken into account when using such tools, it is worth mentioning that they can provide you with a good way to begin your journey into bot trading with simple and small steps.
On the other hand, paid forex trading robots are much more complex and diverse in the features and capabilities that they offer to traders. They can be picked based on various factors among the different platforms and developers that offer them. The price of such bots can range from $10 to $1000 and even more than a thousand.
Free Forex Bots
- Pros
Trading robots that are free are not without their merit. While you have to be very careful in choosing such tools and bots, there are still advantages and pros associated with such free trading tools, some of which are mentioned as follows in this section.
- Cost-effective
Naturally, as the name suggests, free bots are just that, i.e. free. So this is where you can find the biggest and most important advantage of such MetaTrader tools. They are after all free. This means when it comes to automated trading tools, these free robots are the most cost effective and cost efficient methods. This is especially the case with those traders who do not have a broad experience with such tools and similar ones. In this way they can begin dabbling into the domain of automated trading without having to put up money to purchase a paid tool.
- Accessibility
Naturally, another significant advantage that is associated with free forex trading robots is the fact that they are readily available and accessible to users. Given the fact that they mostly go around as a result of word of mouth and user recommendation in community forums and similar environments, access to them is rather easy which facilitates its use for those traders who might not have a lot of experience in this domain.
- Community support
One last advantage that is associated with the free trading robots is the availability of community support for such tools. And the reason for it is also quite clear. As these tools are usually recommended through such communities, it is also possible for users to discuss and get help from each other in the same community and environment.
- Cons
Obviously, the free tools and automated trading solutions will come with certain limitations as it is the nature with tools that are free. Here we will discuss some of the biggest cons that are associated with free MT4 or MT5 trading robots.
- Limited features
The most significant drawback of free trading tools is their limited features. Because they are free, they are of course quite constrained in their scope of capabilities. For this reason, most free tools will only provide users with the most limited strategies and the most limited analysis tools. In most cases, these free tools are only adapted to just one strategy or just a limited number of indicators.
- Performance limitations
The most salient form of limitation that can be seen with free trading bots is of course their performance. The limitations that they face in their performance is due to the fact that they are free and no budget has been spent in their development process. As such, they can be limited in various aspects. For instance, free bots can be quite limited in the amount of capital that they can handle. This means they might only be compatible with a very limited amount of capital. Furthermore, they can have limitations in their handling of market maneuvers and price change that might occur.
- Potential for scams
But of course, do not forget that the biggest disadvantage of free bots, whether for MetaTrader 4 or MetaTrader 5 platforms, is the fact that they have a really high chance of being scams. Remember, free tools are free for a reason. So more often than not, free tools and bots are actually attempts to defraud you out of your assets and capital. One of the most common ways that free bots are used to scam traders out of their capital is by hiding a piece of malware or destructive code inside the tool. Once you install and begin trading with it, the party who is behind the bot will have access to all of your sensitive trading information.
Paid Forex Bots
On the other side of the equation, we of course have paid forex trading bots. Here we have much more advanced and complex automated trading solutions which can cater to the needs of a wide variety of users and be able to execute trades under varying market conditions.
Pros
Of course, because paid trading bots have been developed with a budget and a developing team behind them, they can have much more beneficial aspects.
- Advanced features
Compared to free bots, paid options can provide traders with much more advanced and technically complex features. These include advanced trading strategies that are able to execute trades based on different trading styles and trading methods, thus being able to trade under different market conditions and also different financial assets. In addition, they can have quite advanced risk management models and methods that include various order types that can help you manage the risks that are normally associated with trades through setting stop losses or taking profit orders.
- Customization options
A particular advantage of forex bots, the paid ones of course, is the possibility of customization and personalization on the part of traders. This is a feature for more expert and seasoned traders who would like to configure the bot the way they want. These bots will allow them to customize the bot with respect to numerous different aspects, including with regard to the orders that they can execute, the level of risk tolerance, the level of stop loss, etc.
- Better performance
This is where paid bots shine and can truly distinguish themselves from their free counterparts. Their performance is naturally their best metric or factor that sets them apart. They are designed to be able to handle a large number of orders and execute them as fast as possible. Furthermore, they are able to handle large amounts of capital, something with which free bots have serious issues with.
- Support and updates
One last area of strength before we discuss the drawbacks. A special area in which paid forex bots truly stand out in comparison to their free versions is support. Free bots do not come with a team behind them that can support you if you face any difficulty or if you have a question. This is because more of than not, nobody actually knows who has developed the free bot. Naturally, the case is totally different with paid bots where there are support teams behind such projects to help users with any question or difficulty they might face.
Cons
But remember, just because you are paying for an automated trading tool or just because there is a whole development team behind such tools, it does not mean that they will be without their faults. They will still have certain cons and disadvantages, some of which are discussed below.
- Higher cost
First of all, it is a matter of cost. You of course have to pay for the tool since they are paid bots and not free. So compared with free bots, you might have to spend a lot of money to acquire or purchase these bots. Of course, depending on the bot itself, the price can vary quite substantially.
- Potential for overreliance
An issue that is generally seen with automated trading solutions is that traders might get too reliant on those methods. What you need to know about forex robots is that they are there to facilitate this process and should not be relied upon too much. There are maintenance and adjustments that you need to carry out as the user and always monitor the process of the bot to make sure that it is aligned with your trading needs and requirements.
- Limited access to certain features
This issue is uniquely related to pair bots. As you will invariably see on the websites that offer such tools, when you want to purchase them, you might be asked to pay a one-time price for a premium package, such as a lifetime package. But more often than not, what you will be encountered with is a tiered system of pricing, where you have to pay to get more features of the bot unlocked and have full access to the different capabilities that it has to offer.
Conclusion
In this article we took an in-depth look at trading bots that are available for and compatible with the trading platform MetaTrader 4 or MetaTrader 5. But more specifically we compared free and paid forex bots. In both cases, there are pros and cons associated with the use of either free or paid trading bot.
Whether you decide to begin automated trading with free bots or you decide to use paid options will ultimately boil down to your own needs out of trading. There are also many other factors to consider, such as your risk tolerance, your trading capital, your trading goals, etc. when it comes to picking either a free or paid forex bot.
