Forex trading can be nerve-racking because of the multiple moving pieces and parameters that traders must monitor. For instance, traders must track price charts, follow news that may swing the market, and watch out for market activities over multiple time bands to help them identify trading signals.
At times, emotional and psychological biases can also affect your trading decisions. Having lapses of human judgment filtering through your trading experiences can lead to suboptimal outcomes.
With this at the back of your mind, would you be interested if someone told you that you can achieve the same or even a better forex trading outcome with a hands-off approach? Most people would say yes and that is exactly how automated forex trading software got ushered into trading rooms.
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How Popular Are Forex and Forex Trading?
With a daily trading volume to the tune of $6.6 trillion, the forex market is the largest global financial market. For 24 hours a day, forex traders from Asia, to Oceania, to London, are exchanging one national currency for another. Currently, over 10 million people are actively trading forex, making it one of the most popular forms of asset trading.
The United Kingdom is by far the largest forex trading hub accounting for over 43% of the overall forex trading turnover followed by the United States at 16.5%. The United States Dollar (USD) vs Euro (EUR) is the most traded currency pair followed in second place by USD vs Yen and USD vs Great British Pound (GBP) in the third position.
Automated forex trading software is a programmed forex trading system. It uses either technical analysis or economic news analysis or both to make algorithmic trading decisions. The pre-set criteria dictate market entry and exit decisions.
By executing trades without human intervention, automated software relieves traders of the hassle and exhaustion that comes with daily trading for long hours.
There are many reasons why traders would prefer handsfree forex trading. Here are some of the advantages often cited by traders.
- Elimination of Human Bias -Automated trading software doesn’t suffer psychological and emotional influences like human traders. Instead, they follow cold, logical sequences as programmed, to analyze and identify trading opportunities.
- Helps With Spread-Based Currency Speculations: The software is effective in reading currency price discrepancies and immediately sending buy or sell signals. Using the naked eye, traders often experience lags or completely overlook such opportunities.
- Multiple Account Management– Manual traders operating on a couple of machines can only monitor one screen at a time. On the other hand, automated trading software can keep track of multiple screens at the same time. This ensures that no opportunity goes unexploited.
- Automated Buy or Sell Triggers-Depending on the pre-fed parameters, automated trading software can trigger buy or sell alerts when those indicators or conditions are met. Parameters such as moving average crossovers, triple tops or bottom, and breakthroughs can send trade signals.
Autopilot forex trading systems follow pre-set rules and criteria to scan markets, identify trading opportunities, and execute trades. The rules may either be coded into the software by the developer or tweaked by the trader.
For example, a trader may write code into their forex trading robot to short GBP if the Bank of England deploys quantitative easing as a monetary policy tool. The trader may put in additional instructions such as the positive size to take and the amount to accumulate in profits before exiting the market.
The software may be fully or partially automated. A fully automated forex trading system identifies trading opportunities and opens or closes positions without the trader’s intervention. However, the trader will have to set parameters to allow the system to take profits, stop losses, and decide on lot size.
Partially automated systems on the other hand make trade suggestions based on the set criteria, but the trader must manually execute the buy or sell orders.
What Are the Criteria for Traders in Considering Automated Programs?
The market has several options you can choose from for automated forex trading systems. However, as a quick recommendation, you can try out Admirals MT5 and MT4 auto trading software. They are among the most widely used and are loaded with many useful features.
Here is a run-through of some of the things to look at when shopping for an automated trading program.
Have Your Needs Clearly Defined
Most automated software can generate reports, manage conditional orders, and enforce stop-loss orders. However, you need to check for additional features based on your needs.
Look for aspects such as real-time market monitoring, ability to access the system remotely, terms and conditions for return guarantees, and availability of virtual private server hosting.
Read through Reviews
Some software touted as having high winning trade percentages may in a real sense be losing algorithms. Search for the best forex trading software publishers to read their reviews and see the results they post. However, remember that past performance isn’t a guarantee of future results.
Weigh The Costs
Take advantage of price competition to shop for the best software deal. While at it, ensure you do not push for a price that is too low at the expense of quality.
Try Before You Buy
Run the software tutorial and see if it gives you exactly what you are looking for. Test their customer support if they are responsive and can answer complex questions such as system programming. Test the navigation and the intuitiveness of the software interface to establish its ease of use.
Hands-free forex trading can help you identify forex trading opportunities you would have otherwise missed out on. Using top-of-the-line automated forex trading software, you can save yourself from the human biases associated with manual trading. In case you want to monitor multiple accounts; the software can also help you do that simultaneously. However, when choosing software, consider your needs, check out reviews, compare costs and if possible, try it out before you commit.