Forex Auto Trading – A Beginner’s Guide
Categories: Forex |
Published by: GoofySm
23/02/2023
The competition in the forex market is fierce. And to keep up with that competition, traders often take help of automated trading. Forex automated trading is all about using automated or computerized systems to ensure trading success. In this article, we will see how you can take help from it to improve trading results.
Difference Between Manual and Automated Trading
Manual trading involves trading with traditional methods. It means that traders have to dedicate time, energy, and effort to trade forex by sitting in front of screens. And doing so, they might not be able to take care of other crucial aspects of their lives – careers, family, etc. Automated trading helps traders in that case; it helps traders take care of other things while an automated system does the job, even without their presence.
Manual trading is prone to emotional trading, but automated trading does not involve emotions, as a computerized system traders for you. Automated systems work by taking into consideration data like currency price charts, indicators, etc. They also analyze market activity over multiple timeframes. Read More
Is Automated Trading Profitable? Does It Work?
Automated trading is profitable in the long run, of course. It works because it is popular in the market, and many brokers provide it. Plus, if used correctly, it can up your game!
How to Get Started With Automated Trading?
There are several trading platforms and automated trading types that you can choose to trade forex profitably. They are as follows:
Copy Trading:
In copy trading, you can copy trades of expert traders. It is an effective and low-cost solution to trading forex automatically.
Trading Robots:
Trading robots function independently from a broker. They can be coded with the help of programming languages like Python or R.
MT4 and MT5:
MT4 and MT5 are popular trading platforms that you can use to trade automatically with help of Expert Advisors – also known as EAs
Automated Trading Apps:
Automated trading apps offer cloud-based solutions to traders who trade via a mobile phone.
What to Remember When Opting Automated Trading?
Before getting started with automated trading, make sure you test your strategies beforehand. Test your strategies and robots on a demo account before trading on a live account. It is advised not to blindly rely on automated trading and keep monitoring your trades because your strategies could fail because of unprecedented market direction or technical glitches.
How to Choose the Best Automated Software?
Understand Your Goals:
Without defining your goals in a clear way, you won’t come to know what your future will be like. Plus, your direction will not be defined.
Read Reviews of Other Traders:
Consider what others have to say about the brokers you wish to choose. Focus more on issues, technical glitches faced by traders.
Consider Costs:
Automated trading can be costly, so consider the costs wisely. Plus, consider your trading account size that fits your needs.
Trade on a Demo Account First:
To analyze the performance of automated trading, you should use a demo account before using a live account.
Advantages and Disadvantages of Automated Trading
Advantages:
- There is no emotional trading involved
- Opportunity for cross-asset diversification
- Reduction in stress levels
- Improved trading speed
- Avoidance of repetitive technical analysis
- Low capital requirements to start automated trading
- Access to high liquidity
- VPS hosting
Disadvantages:
- Since automated trading utilizes technical analysis, they might fail during the times where fundamental analysis is needed.
- The best ones are expensive and many traders cannot afford them.
- They might be prone to technical glitches.
- The industry is filled with scams
Here, you saw how automated trading helps you up your game. Consider automated trading if you want speedy execution of your trades. Of course, it is not 100% profitable, but it still is result-oriented, and it gives you the results according to your knowledge, skills, and expertise.
