Expert in Automated Forex Trading: Strategies for Success

Automated trading in the Forex (foreign exchange) market is called “automated trading”, also referred to as “automated forex trading”. This term expresses the use of software and computer systems to execute trade transactions automatically without manual intervention by the trader.

Automated trading relies on a set of algorithms and software rules that are constantly modified and improved to meet market requirements and trader strategies. Automated trading allows investors to execute trades very quickly according to pre-defined parameters, using technical indicators, market signals, and other analyses.

How does the automated trading program work? Automated trading software typically requires a software application associated with a direct access broker, and any specific rules must be written in the language of that platform. For example, the most popular trading platforms: MetaTrader 4 and MetaTrader 5 use the MQL programming language, while NinjaTrader uses the NinjaScript programming language. Some automated trading platforms contain “wizards” for building trading strategies that allow traders to make choices from a list of commonly accessible technical indicators to create a set of rules that may be traded automatically.

For example, you can be certain that a buy trade will be entered as soon as the 50-day moving average crosses the 200-day moving average, on the 5-minute chart of a specific trading instrument. You can also enter the type of order (such as market or limit orders) and exactly when the trade will be triggered (for example, when the next bar opens or when the bar closes), or you can exploit the default inputs of the trading platform. However, many traders decide to program their own trading strategies and custom indicators, or work closely with a programmer to design their own automated trading software.

Pros of automated trading and Forex robots

  • Automated trading reduces the impact of emotions involved in the trading process. By keeping emotions at bay, traders generally have a better time sticking to their basic plan. Since trade orders are automatically executed once the trade rules are met, there will be no opportunity for traders to hesitate or question the trade. In addition, automated trading can prevent overtrading (i.e. buying and selling at every perceived opportunity).
  • Automated trading also maintains discipline. With trading rules set and trade execution automated, discipline is maintained even in volatile markets. Discipline is often lost due to emotional factors such as fear of loss, or the desire to gain more profit from the trade. Automated trading helps ensure that discipline is maintained, because the trading plan will be followed precisely. In addition, manual error is reduced, for example, an order to buy 100 lots will not be entered incorrectly instead of selling 100 lots accordingly.
  • Helps achieve consistency and continuity. One of the biggest challenges in trading is planning the next move. Even if a trading plan has the potential to be profitable enough, traders who ignore the rules beyond any expectation that the system will actually have an impact.
  • Another benefit is improving the speed of entering trades. Because computers respond instantaneously to changing market conditions, automated trading systems are able to generate orders as soon as the parameters of a trade are met. As a result, entering or exiting a trade a few seconds earlier can make a huge difference in the outcome of the trade. Once a trade is entered, all other orders are automatically generated, including protective stop losses and take profit targets as well

Disadvantages of automated trading and Forex robots

  • Despite the advantages, you should know that automated trading is not free from some disadvantages. The theory behind automated trading makes it seem simple: set up the software, program the rules, and watch them trade. However, reality does not always reflect anticipation. Automated trading is not infallible. Depending on the trading platform, the trade order may be physically located on a device
  • This means that if your internet connection is lost, the order may not be sent to the market. There may also be a discrepancy between the so-called virtual trades created by the strategy, and the order entry platform component that converts them into real trades. Most traders should expect a learning curve while using automated trading systems, and it is a good idea to start with small trade sizes as you refine the process.
  • The second negative is surveillance. Although it’s great to run an automated trading software and leave for the day, automated trading software requires monitoring. This is due to the possibility of technical malfunctions, such as connection issues, computer crashes, power loss, and system quirks. It is possible for an automated trading system to encounter anomalies that can lead to missing orders, wrong orders, or even duplicate orders. If the automated trading software is monitored, these events can be identified and resolved quickly.
  • Another obvious drawback is excessive programming. Although it is not limited to automated trading systems, traders who use testing techniques can produce systems that look great on paper, and perform great in the live market. Thus, over-programming refers to excessive curve gain, which creates a trading plan that is impractical in live trading.

Identify the widespread scams of automated trading programs

The biggest disadvantage of automated trading systems in the Forex market is that there are a lot of scams. The more you search for the perfect system, the more likely you are to see a page promoting an automated trading software with 100% daily returns. These pages display MetaTrader records that show how profitable the Expert Advisor is – and they usually come at a price. You can purchase some programs for as little as $25, while some cost up to $1,000.

Some websites will guarantee high profits, and may offer money-back guarantees. However, the vast majority of these types of expert advisors for automated trading are unfortunately scams. Think for yourself for a moment. Would you sell a highly profitable trading system if you could make profits from a managed account? Probably not. Would an efficient automated trading system be priced at $25? Again, this is highly unlikely. It is important to be able to identify the scams of automated trading software providers and not fall for their tricks. In general, it makes sense to avoid anything you have to pay for. Not only will you lose money when you purchase the software, but if you use the advisor on a live account, you may also lose your trading balance.

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