What Automated Trading Options are Available in the Forex Market?
Forex EAs and auto trading systems allow online trading around the clock, greatly facilitate the work of a skilled trader, and reduce mental and psychological burdens. Resorting to the automated systems is a good help in work, expansion of possibilities, and reduction of risks. However, you should keep in mind a number of details.
Automated trading is based on algorithms created on the basis of the knowledge and experience of traders from all over the world. Thus, you can take advantage of ready and proven schemes at any time, which you will not have to learn for a long time.
One of the options is to choose a trader who works in the market and set up a program so that it copies his trades. However, you should not think that the machine will do everything for you, and simply repeating the actions of experienced traders will immediately lead to success. Any trader can make a mistake, and it would be doubly offensive to automatically copy his mistake. In addition, not all traders provide access to copying their actions, and usually not for long. You will have to change signal providers all the time.
Of course, the program can take a certain amount of routine work, but it will have to be competently set and controlled. This requires your fundamental knowledge of the forex market, taking into account the news, expectations, and personal experience. That's why the best option would be applying forex EA together with your personal knowledge. Give to the machine known repetitive operations, and you are engaged in strategy development and analysis of non-standard situations.
Forex Trading Signals
Forex trading signals EAs are one of the popular software tools that automatic trading systems use. You can receive them daily, on a paid or free basis, like millions of traders around the world. Trading signals are especially relevant for those who trade in parallel with their other jobs or studies. A trading signal is automatically generated information about a certain currency pair and entry point, based on which you can make a trading decision. In order to get trustworthy trading signals, you need to find a reliable company or a specific trader who provides them. Only then you can expect to increase your profits and improve the quality of your work.
The best option is to check trading signals from several sources that you find reliable. While this will affect the speed of decision-making, it will also reduce the risks. When you gain experience, speed will come.
Trading signals are used not only by beginners but also by experienced traders, for example, to develop their own strategies.
Trading Robots and Advisors
Trading advisors (EAs) are programs that analyze the market according to parameters set by you, and trading robots are programs that automatically implement your current trading strategy. The leading forex trading platforms have preinstalled programs. In addition, you can find and install other robots and advisors for them, both paid and free. As a result, you will be able to:
- Quickly create and practice new strategies;
- Reduce time spent at computers;
- Increase speed of placing orders;
- Quickly make the necessary settings of currencies and algorithms.
You must be aware that there are no magic tools, and that negative trades are normal, even when using advanced software. It is important that the number of profitable trades, in the end, exceeds the number of losing trades. Therefore, if your Expert Advisor has suddenly closed a trade with a negative result for you, do not be alarmed and do not immediately reconfigure it. Just stay calm. Of course, this is only possible if you have sufficient funds. To insure yourself, before you start testing the Expert Advisor on historical data, see what happens. Such an opportunity is provided, for example, by the MetaTrader 4 trading platform.
What Types of Trading Forex EAs Are Suitable For?
For technical analysis trading
With the help of the best forex EA, you can make a graphical layout of the chart, add the necessary indicators, set horizontal levels and get ready to track different types of movements: you can trade along with the trend, against the trend, or during a sideways market. It is also possible to carry out a complex analysis of several time frames at once and apply the data to trades by the method of scalping and pipsing.
For fundamental analysis trading
Forex EAs and auto trading systems help to collect important statistical information which can change the behavior of the price on the chart. Then this information is packaged in simple instructions that are easy to learn and use to make informed trading decisions: you can timely enter into a trade or close all positions and stay out of the market.
For wave trading
By implementing EAs, it is possible to calculate the length of waves, make a chart layout and install special indicators that can show the future price movement based on its current position. You can set up a notification system and get information about when a wave ended, a correction began, or a cycle change occurred.
For graphical analysis and candlestick patterns
The best forex EA will help to recognize and identify different price formations which can be used to make trading decisions. The calculations can be carried out simultaneously in all time frames and EA can highlight only those graphical formations which correspond to the mathematical parameters set. If there is no correspondence, there will be no signal for the market entry.
For Martingale trading
You can use the trading advisor to search for entry points, calculate the risk management for each trade, and deliberately interrupt trading when the total loss exceeds the allowable norm. In this case, the loss norm itself can be regulated and set based on one day, week, or trading month.
For trading other analysis methods
Above we have listed popular methods of market analysis of the forex market. At the same time, it is possible to trade by volume, use arbitrage strategies, apply a grid of averaging positions, connect the market profile, and more complicated calculation methods. You can use a trading forex EAs and auto trading systems everywhere. Somewhere it will perform a reference function and confirm the decision, and somewhere it will base the entire trading system on its data.
Advantages and Disadvantages of Automated Trading
- The process goes on around the clock or at the hours you specify - for example, at night;
- The program is not subject to emotions, does not get tired, and makes actions only based on objective information. And it processes data at a higher speed than a human. As a result, decisions are made quickly and accurately.
- Good income when properly installed and configured;
- Adjustments in the work of the advisor can be made at any time, or completely eliminate from trading in case of a force majeure situation in the market;
- You control your own time - robots trade for you. You only need to choose the right trading advisor for auto trading.
The main disadvantage is that the program does not deviate from the specified algorithm, which is a particular situation can be less than ideal;
- A reliable Internet connection will be required because in case of communication failure, you can suffer losses;
- Automated trading does not take into account and cannot react to market news correctly;
- Trading advisor in auto trading is not profitable to use in non-standard situations on the market; Expert Advisors use certain types of markets, but initially, all of these indicators must be set by a person, setting up the trading advisor.
The opportunities offered by automatic trading should not be overestimated. Otherwise, you will waste a lot of time searching for the best signals, robots, and advisors instead of gaining new knowledge and experience. In addition, it is impossible to set the right settings for these programs without sufficient theoretical training.