Trends come and trends go and nowhere is this more true than in the realm of forex trading. It seems that everyone and their uncle is telling you that a given market is predictable and they have a secret, either better research or a magic algorithm, and they want to bundle it into a picker program or a trading robot. The promises are all the same – "You can be an idiot and let the software do all the work for you…"
IvyBot is the latest contender in the ‘trading robot business’. Put together by a quartet of Ivy League students who lived mathematics in their dorm room and traded forex currency markets, first to cover expenses, and then to make a living, it’s the culmination of years of research and tried and true experience on the market between two top flight quantitative analysts and market researchers and two computer programmers (there are now a few more coders who handle the updates, but the fundamentals remain the same).
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IvyBot works as a transaction manager with some built in intelligence – it’s programmed to look for certain sets of conditions based on the opening and closing prices and where certain currency sets are in relation to each other, and makes recommendations for currency purchases and sales; the currency pairs it works on are USD/EUR, USD/JPY, JPY/EUR and USD/CHF. (If those acronyms don’t mean anything to you, they’re US Dollars, Euros, Japanese Yen, and Swiss Francs.)
How is the IvyBot Forex Robot working?
What IvyBot is doing under the hood is a triangle trade pattern between the Euro, Dollar and Yen – over long term cycles, anything that drives the Yen down will raise the Dollar, anything that drives the dollar down will raise the Euro, and anything that drives the Euro down will influence the Yen. In situations that don’t meet any of those parameters, it will move out of dollars and into Swiss Francs as a safe hold.
Now, it’s great that IvyBot will make these recommendations for you; this is a very basic set of strategies that most Forex courses will teach on day two or three, after covering concepts like hedges, leveraged accounts and other tools of the trade. It’s possible to make money with this basic strategy – billions of dollars of currency are traded on this pattern (sometimes with different ‘escape hatch’ currency) every day, and it works on the assumptions that the three largest central banks in the world won’t go insane all at the same time.
That said, trusting any trading robot to do all your trades for you – even one that gets regular and systematic updates like IvyBot, is a recipe for disaster. Just because the trading robot is programmed to follow a strategy, you still need to understand correlations in currency pairs and be able to watch the news and understand how that news will impact your trading strategy. IvyBot is also biased with whatever trading knowledge and habits its programmers have, and may change – or not change fast enough if something radical happens in the market.
Conclusion
So, in summation, IvyBot is an excellent automation tool with some awareness of a generally sound, if somewhat basic, triangle trade strategy. It’s constantly updated, and the people who put it together have a real track record. That said, you should use it as a set of training wheels while you learn what’s really going on, just to make sure you’re making fiscally sound decisions.