The idea of using automated software in trading forex is a dream for most traders. Most traders prefer automated software programs to automatically enter and exit trades and ensure they make better trading decisions. If you are new to automated forex trading, it is always best to take time to understand the concept.
By taking your time to understand what a trading software is and how it works, a trader gets the knowledge they need to ensure they pick the best trading software. Here is everything you need to know about auto forex trading using automated programs.
Automated trading software
This automated trading program makes trading decisions on behalf of human traders. With these programs, you can set trading criteria to determine your entry and exit points in forex markets. You can also use the software to set up rules for money management for your forex account. Once programmed, the automated software monitors the market traded and automatically makes moves.
As a user, the entry and exit rules you set for the trading software can vary from simple instructions to sophisticated ones when using complicated strategies. This is made possible by using the programing language used by the trading platform you are registered on.
Today, traders can use automated trading software to make money on different markets like shares and forex markets. The software is available to anyone with a PC/trading device and a reliable internet connection. The use of these automated trading systems is especially common amongst newbie traders who have little knowledge of the markets and prefer not to lose money while they learn.
Generally, automated trading software systems can fall under either forex robots or expert advisors. These categories comprise software developed by market programing experts who take the time to write the algorithm while analyzing market trends carefully.
The main difference between forex robots and expert advisors is in the trade placement. Expert advisors are not programmed to place market orders as the human trader would automatically. They are mostly used to offer the trader with trading signals and alert them on the best times to enter or exit trades. On the other hand, forex robots are programmed to deal with the whole trading process without involving the trader.
How automated trading forex works
The best auto forex trading systems are designed to analyze currency price charts and market activity. The software configurations are set with the ability to identify key trading signals like trade discrepancies, relevant news affecting the market, price instability trends, and fluctuations in currencies. All these processes take place simultaneously while still implementing trade decisions.
Some trading platforms have created wizards for strategy building. These allow the traders on the platform to create and set trading parameters using common indicators as the basis for automatic trading. This way, traders can establish specific short trade opening positons for particular markets. This also allows them to choose the type of order to be placed and when it is to be placed.
Most traders prefer to create their customized indicators and trading strategies. When they are not knowledgeable in this field, they employ programmers to create them. This approach requires more effort than the use of a readily existing trading wizard. However, it can be more rewarding to the trader and provides more flexibility to the trader’s strategies.
If you are thinking about programing your own strategy, bear in mind that the automated system you create requires software application that can link to a direct access broker. The trading criteria for any program should be written in a programming language that can be understood by the trading platform you are using.
For instance, Meta trader 4/5 uses the MQL programing language while other platforms use the programing languages.
Once the system rules have been set, the software automatically starts to monitor the market and exploiting buy or sell opportunities based on your trading strategy.