Automated Forex Trading Definition – How does it work?

Forex Traders » Automated Forex Trading Definition – How does it work?
Automated Forex Trading Definition – How does it work? 2020-02-19T22:17:12+02:00

Automated Forex Trading is a system of trading foreign currencies with a computer program. This is based on a set of analyses that help determine whether to buy or sell a currency pair at a given time.

Automated Forex Trading uses a computer program that the trader teaches to make decisions following a set of technical rules. The signal generates an actual buy or sell order which is them executed.

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How Automated Forex Trading came to be

Due to the extreme popularity of Forex Trading in the past few years and the 24 hour nature of the market, and at the same time many investors work on algorithmic trading, some retail traders have finally been able to harness the power of Automated Forex Systems. Many Forex brokers let traders automatically run these programs to execute trades.

Pros and Cons of Automated Forex Trading Systems

Since the creation of Automated Forex Trading Systems, a lot of things have become easier and it opened a doorway for new privileges. However, that’s not the entire case. As you all know, technology is a double-edged sword. So, we’ll be discussing the great opportunities and the misfortunes of the Automated FX Trading

The biggest advantage of the Automated Trading is that it annihilated the emotion out of the process. The behavioral impact which negatively impact the investment decision making is finally reduced.

Traders can also backtest a trading system to see how it functions based on past data. This helps fine-tuning the strategies before using the capital. Also, traders don’t have to be present to generate profits from systems.

Sadly, Automated Forex Systems tend to be hard to develop. In spite of the good results shown by backtesting, past performances can never be considered a guarantee. Traders should deal with Automated FX Trading Systems with extreme care and caution to avoid having problems, since they offer no or limited benefits for the future.

How Automated Forex Trading Systems work

Whether you’re new in the business or a professional, you can use Automated Forex Trading Systems to make real trading decisions on your behalf.

The software helps by identifying key trading signals, including all sorts of spread discrepancies, price instability patterns, news that might affect transactions, and fluctuations in currencies, all while performing your trading activities, and to keep any losses to an absolute minimum.

Automated Forex Trading Systems will also locate the profitable currency pairs, and doing all of this before placing trades on them. If the software program can be set with user defined criteria. It can help in broadcasting a sell or buy alert, and can automatically perform the trading. This can also help in making transactions profitable.

automated forex trading south africaSome Automated Forex Trading Platforms have strategy building wizards that allow traders to make choices from a list of commonly accessible technical indicators, to build a set of rules that might then be automatically traded.

Users can also input the type of order and precisely when the trade will be triggered. They can also exploit the platform’s default inputs. However, a lot of traders decide to program their own trading strategies and custom indicators, or they work closely with a programmer to design their Automated Trading Systems. Whilst this often requires more effort if you compare it with using the platform’s wizard. It permits a much greater degree of flexibility, and the results can be considerably more rewarding.

If you are planning to program your own trading strategy, however, keep in mind that most Automated Forex Trading Systems require the application of software that is linked to a direct access broker, and any particular rules need to be written in that platform’s proprietary language.

Are the Automated Forex Trading Systems profitable?

After seeing how the Automated Forex Trading Systems work and getting familiar with their pros and cons, the most important question still lies. Are they profitable and guaranteed or not?

Well, the Automated FX Trading Systems do not guarantee 100% profit. However, they make sure that you’ll benefit as much as you can from them and from market movements.

These specially designed programs are very easy to use and work with. So, as a beginner, you don’t have to be afraid of having to take special courses to be able to deal with them. All you have to do is download and install the program and then adjust the settings on your personal computer. After that the Automated Forex Trading System will start immediately and you’ll observe as it begins to generate fast results.

Be careful! Many Automated Systems are offered for free with extremely appealing service guarantees. However, these programs aren’t faultless. The sad truth is that one of the main misfortunes is that some of the systems are possibly associated with scams. So, make sure to check the privacy parameters programmed into the system are correctly set and checked.