If you are doing forex trading for a long time, you must be knowing how tiring and time-consuming the process can be. Therefore many forex traders take the help of a specialist or look for intelligent partners, who won’t get swayed by emotions and make logical decisions. If you are looking for a partner who can help you succeed in trading, the Automated Forex trading system might be the most suitable option for you.
With the potential risks of losing and the possibility of risk management strategies not working properly, having a robot that will help you attain the desired profit without any hassle will be a great help. Today, there are numerous multi-asset brokers like RoboForex that offer the best instruments and platforms for trading. They also offer premium conditions for trading forex on prime accounts, along with offering automated services that make trading extremely comfortable with guaranteed profit.
If you have also desired a system that will ease your exhausting task of trading and get your guaranteed profit, you can go through this guide and learn about Automated Forex Trading. Compare their pros and cons and see if this is the ideal partner that you have been looking for.
What is Automated Forex Trading?
Automated Forex trading uses software or algorithmic program to trade foreign currencies. This software-based trading will have to analyze the market and make a trade based on a pre-determined analysis that helps in determining when is the best time to buy or sell currencies.
In Automated Forex trading, traders can set rules for entering and exiting a trade. Based on the knowledge of these predefined parameters, the computer will be monitoring the trade and perform various actions on behalf of the trader when the market is favorable for them. These automated systems will monitor changing marketing conditions such as exchange rates, and stock prices, and track currencies with the most favorable trade in real-time.
Trade will be done based on the predetermined parameters for exit and entries that are encoded into the system. These conditions can be based on simple stock market technical analysis like moving average cross over or it can be based on complicated strategies as well. The only human intervention required is to change or alter the trading algorithm and the parameters set for entering and exiting the trade based on its relevance and performance in the market.
Pros of using Automated Forex trading
Various benefits of automated forex trading make the cumbersome manual trading easy. The top benefits are:
Eliminates the emotional aspect of trading
One of the biggest benefits of making forex trading automated is that it mitigates the emotional and psychological impacts. While trading manually, most of the time, we make hasty decisions that we may regret later. By using automated trading, you will be able to separate trading from emotions as it will enter or exit the market solely based on the set of pre-determined algorithms.
While trading manually, due to fear of losing, we often tend to overtrade or at times deviate from our forex trading strategy to grow more profitable. But with automated forex trading, you will be able to maintain discipline and stick to the strategy.
Automated forex trading requires very little effort from the individual’s side. The trading will take place based on the pre-defined parameters set by the traders. It will automatically buy and sell currencies based on these parameters. An individual will only have to interfere during the initial phase and tweak the strategy based on its performance.
In this fast-paced world where time is considered money, traders may not get enough time to observe the market and trade accordingly. As automated trading is highly efficient, you do not have to spend your entire time trading.
In the world of the financial market, the speed of entry and exit is a very big success factor. Automated trading will respond immediately when the market meets the predefined criteria and respond to it immediately.
Analyze trade efficiently
Automated forex software can efficiently analyze data charts, track market timeframe, and understand the trend of the market in real-time. Using this software, it is also possible to predict the market trend and prize trend, thus making it make maximum out of currency pairs.
Transactions have become easy
With the help of automated technology, forex transactions can become easier. There are various gateways available for deposits and withdrawals, thus making the transaction accessible and faster.
Automatic trading enables traders to handle multiple accounts and allows traders to imply various trading strategies at the same time efficiently. Diversifying trading is very important as it will reduce the risk of losing all your finances by investing on a single platform. By spreading your investments in various instruments and markets, you can improve the opportunity for making more profit.
Cons of automated forex trading
Even though automated forex trading opens various opportunities for you to improve your trade, it also has some cons that all traders should be aware of. They are:
Many of us think that since their trades are automated, they do not need to monitor. Some of them even turn their computer off and lets their tool handle everything. To an extent this is correct, but still, you need to understand that regardless of how sophisticated your software is they are not infallible. Problems like technical issues, unstable internet connection, or malfunction can happen at any time, hence monitoring regularly is essential.
We tend to believe that automated trading will be resulting in more wins. Due to this belief, we tend to over-optimize our trading strategies expecting high returns. But the issue is that over-optimization of the current market can yield unreliable results in trading events of the future.
There is an amount of uncertainty
No matter how experienced a trader you are or how advanced software you are using, mistakes do happen. In the case of automatic forex trading, it does not guarantee a 100 percent win. It is highly unpredictable and a win in the past does not guarantee that you will become a successful trader. Regardless of this uncertainty, automated forex trading software will give you a competitive edge that can improve your winning opportunity.
Setting up automated trading software and tools is extremely useful as it makes the exhaustive process of trading simple, quick, and more accessible. But like any other tool, automated forex trading software has some disadvantages that should not be overlooked. So, study its pros and cons, see how it will affect your trading, and implement it wisely.