Forex robots have really grown in popularity in the last few years. These automated expert advisors are usually set up to work with a platform called MetaTrader4 and are able to place trades on your behalf. They are pre-conditioned to enter positions based on specific market criteria however the trouble is that most of them ultimately fail. So why is this?

Well I personally believe that the major problem is that many of them don't use proper money management techniques. If you want to generate some decent profits from currency trading, you need to grow your capital slowly over time. You should forget about using leverage to target those really big profits. This will usually end up destroying your capital.

What you need to do is to target steady gains whilst ensuring that your losses are small and contained. Sadly when you employ one of these automated robots, this is not always possible to do. The stop loss is often set by the expert advisor and it's often not recommended you change this stop loss yourself.

Worst of all you will generally find that a lot of these expert advisors use excessive stop losses in the region of 400 or 500 points, for instance. So if one of these stop losses is triggered soon after you start using the robot in question, this could well be enough to wipe you out, and if it doesn't it will certainly eat up most of your trading capital.

Not only that but the profit targets per trade are often in the region of 20-50 points. So what they are basically doing is holding onto a trade long enough for it to move into profit, and by using such excessive stop losses they are giving themselves every chance of achieving these profit goals.

So you should pay close attention if you notice that the forex robot you are using yourself is using similar targets and stop losses. Ideally a top quality expert advisor should be looking for large profit targets using small stop losses, but sadly not many robots actually do this in reality.

So to sum up, the main reason why many of these forex robots ultimately fail to generate any decent returns in the long run is because they don't use proper money management rules. There are other reasons of course, such as the fact that a lot of them are unable to adapt to changing market conditions, but this is one of the main reasons.