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Trading the forex market can be challenging. Even if you’re armed with solid technical analysis skills and a thorough understanding of how currency prices fluctuate, traders can still easily fall victim to nerves or human error.
There’s also the fact that trading manually is incredibly time-consuming and inefficient. As technology continues to advance, traders everywhere are looking for new ways to streamline their trading processes and increase their profits as a result.
Luckily, the rise of artificial intelligence (AI) and algorithmic solutions has made this a reality for many traders. In this blog post, we’ll explore what exactly forex trading automatic is, its benefits, and some top providers in the industry.
Automatic forex trading is a method of online trading where a computer program (automated trading software) is used to make trades automatically based on pre-determined trading rules.
This can include placing buy and sell orders on the trader’s behalf, managing existing positions, and even closing out losing trades. Automatic forex trading is often used in combination with other forex trading strategies to make them more effective. Some automated forex trading software also includes other features such as charting, technical analysis, and newsfeeds to make it easier to analyse the market and make profitable trades.
Keep in mind, the computer program will only execute the trades that are programmed into it. Traders cannot simply let their computers do all the work for them. Automatic trading is used to make more trades, in more market conditions, and at a faster rate than traders could manually. It’s like having your trading assistant that can make trading decisions 24/7.
There are many benefits to using automatic forex trading software, including reduced trading time: If you’re using automated forex software, you reduce the total amount of time spent trading. This is because automatic trading software is designed to make trades faster and without emotions or human error.
Automatic trading software can also be programmed to execute your stop loss orders (limit orders) faster than a human trader would. This is extremely important when it comes to protecting your profits, as well as managing your risk. Easier to multi-task: As automatic trading software is designed to help you make more trades, you can use this extra time to do other things.
This could include working on other income-generating projects, spending more time with family, or even taking care of other important tasks that are on your to-do list.
Automated trading is also great for night owls and those who work unusual hours as you can make trades whenever you want. Easier to stay disciplined: When you know that every trade is being executed automatically, there’s less chance of you breaking your trading rules. You can use pre-programmed trading rules to prevent you (and your emotions) from making impulsive or irrational trading decisions.
Less risk of human error: One of the biggest risks when trading manually is making a mistake. This could be anything from entering the wrong order type to accidentally hitting the wrong button and triggering a trade you didn’t intend to. Automated forex trading software is designed to be as mistake-free as possible.
Several different strategies can be implemented using automatic forex trading software. Here are just a few of the most popular ones:
Trend following: This is one of the most common automatic forex strategies and involves following trends in the market. You can use this strategy in any market condition, although it’s particularly effective during trending markets.
Mean-reversion: Mean-reversion involves taking advantage of the price reversion that occurs when an asset’s price temporarily deviates from its long-term average. Traders will often look for assets that are priced below their long-term average, and then sell those assets when they return to their normal price range.
Stop hunting: Stop hunting involves the trader using an automated forex strategy to buy assets once their price has exceeded its stops, and then selling the asset once its price drops back down.
Bollinger Band strategy: This strategy is mostly used with stocks, but can be applied to the forex market as well. Bollinger Bands are two price channels that contain a stock’s price fluctuations and help you identify entry points and avoid over-trading.
MACD strategy: The Moving Average Convergence Divergence strategy is based on the crossing of two averages. Traders will buy when the short-term average crosses above the long-term average, and sell when the short-term average crosses below the long-term average.
As we’ve discovered, there is a range of different benefits to using automated trading software. Now, it’s time to look at the different providers and explore which one best fits your needs. Here are a few things to keep in mind:
Reputation: Before you sign up, make sure you do your research. Is the provider reputable and trustworthy? Are they transparent in their pricing? If there are any complaints, are they resolved promptly?
Cost: While some providers offer monthly plans, others charge a one-time fee. You can estimate your software costs by calculating your expected monthly volume.
User experience: Does the provider offer excellent customer support? Can you access training materials and live webinars? Does the interface feel user-friendly and intuitive?
Automatic trading software functionality: Does the software offer the functionality you need for your trading strategy? Does it integrate with the charting software you use?
Trading platform: Does the software come with its trading platform, or do you have to use your own?
Trading performance: Does the software offer real-time market data? Does it execute orders quickly?
A great place to start the search for a suitable automated trading solution is the MQL5 marketplace. The MQL5 marketplace is the world's largest online store of trading robots, offering the widest range of solutions (paid and free) with trading robots that can perform market transactions automatically.
With these applications, you will be able to perform deals in the MetaTrader 4 trading platform (the most popular forex retail trading platform, globally) in a more informed manner, while capturing more opportunities. It is also possible to check the performance of each automated trading system and even download a free demo for real-time testing purposes.
Our second suggestion is to take a peek at the FXBM marketplace, a technology marketplace, or as they like to call themselves, the Google Play of FX Bots. Similar to the MQL5 marketplace, the FXBM marketplace also provides the stats for each trading robot on sale (also available as a copy trading service), so users can have an idea of the robot's potential (or not).
As you can see, automated trading can be a highly effective way to trade the forex market. With the help of automatic trading software, you can make more trades automatically, increase your trading volume, and reduce your risk at the same time.
Overall, automated trading software can help you grow your account faster, which is great news for everyone. Now, the only question that remains is: are you ready to jump into the world of automatic trading?
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