Auto trading was introduced pretty early on in the forex market especially with the MetaTrader 4 platform. We have seen many auto trading applications developed over the last 10 years or so the biggest of which : Mirror Trader , Zulu Trade , MyFxbook and more recently the MQL5 community. These were all developed because traders noticed that 1. It is difficult to trade 2. Automated systems are more accurate than humans 3. You cannot sit in front of your screen and watch the market all day.
Auto Trading Statistics
It is estimated that over 75% of all traders use some sort of auto trading system, this includes expert advisors and copy trade services as the ones shown above. Further 93% of successful traders use automated trading tools. There is a common misconception that forex robots / ea s / expert advisors are risky. Your typical $99 forex robot is usually risky but this is because it is not a proper auto trading system. Any system that can be manually traded can be automated. The automated version will outperform the human counterpart in the majority of situations.
Copy Trading or Forex Robots ?
People are devided on this. For me it is obvious that good forex robots still have the advantage. Copy trading platforms suffer from 2 big problems which directly affect each other: Latency and Slippage. Latency is the amount of time it takes to copy the trade to your account, there is always a delay. Slippage is the difference in price where your order is opened versus the price that is opened on the account you are copying. For some strategies this is not a major issue but for the best trading strategies namely scalpers this is an absolute killer.
Scalping strategies take advantage of small quick movements in the market, therefore the timing is crucial and there cannot be any delays. the only way to successfully auto trade these strategies is by attaching an expert advisor directly to your metatrader 4 account. There is still slippage involved but with the right VPS there is limited latency. There currently is no way to get the latency on a copy trader low enough to be able to employ scalping on the auto trading platforms.
To make sure you understand the difference between auto trading platforms and forex robots I suggest you open 2 small accounts and try out each option on an account. You will quickly be able to see whether you prefer forex robots or auto trading applications.