Automated Forex Trading - Forex Advisors

Automated Forex Trading is one of the key questions that sooner or later both beginners and experienced participants in financial markets turn to. Today, there are a number of tools that allow you to reduce the time spent on analysis, forecasting and mechanical opening/closing of transactions.

But, unfortunately, automatic Forex trading is not a guarantee of profitability. There is no single solution that would completely eliminate the need for a user to be present in front of a monitor with an open trading platform.

KEY TAKEAWAYS

• Automated Forex trading is a trading method that involves process optimization and automation.
• Automated Forex trading without control leads to the loss of the entire deposit or part of it.
• Forex trading is directly related to emotions, and the one who has less of them, as a rule, wins.
• The leader among terminals for algorithmic traders is MT4.

What is Automated Forex Trading

Automated Forex trading is a trading method that involves process optimization and automation. An ideal Forex trading automation tool implies a completely independent analysis of markets, forecasting, opening and closing orders, setting optimal transaction parameters, and selecting trading terminal settings. This definition covers only automatic advisers (robots for Forex trading), which are activated in the Metatrader as well as NetradeX trading terminal.

If you are novice in trading, and want to better understand Automated Forex Trading we suggest starting from What is Forex Trading first.

Today Automated Forex Trading is needed for the following:

Reducing the time the trader is present at the monitor.

• Testing various Forex trading strategies.
• The ability to delegate tasks by setting up automatic opening and closing of orders according to the set parameters.
• The ability to avoid foreign exchange risks associated with external factors (for example, the risk of a power outage and the inability to close the transaction manually at the right time).

Automated Forex trading is an opportunity to simplify trading, but most of the robots are not able to guarantee a return of even 75%.

Therefore, the use of robots, advisors must be accompanied by control.

Note: beginners who do not have the skills of independent analysis resort to this format of trading. But sooner or later, automated Forex trading without control leads to the loss of the entire deposit or part of it.

What should you know about Forex automated programs

Multicurrency robots that do not use indicators

Such a tool allows you to automatically trade in the terminal on any currency pair. It is not rational to use raw materials and precious metals as an asset, since the influence of fundamental factors is too great. Multicurrency robots are based on the Martingale method, a grid of orders. The degree of their risk is maximum, but if successful, they can bring tens and even hundreds of percent of profit.

Indicator Robots

This type of bot automatically determines oversold and overbought levels/reversal zones/trends and tendencies. All this is carried out due to the parameters of indicators (for example, MACD, MA, Bollinger bands or others).

Scalpers

Automatic bots that trade with a minimum order expiration time (from 30 seconds to several hours). Up to 10 transactions can be closed per day, but the profit (loss) for each will be only a few points or several tens of points.

Choosing one or another type of robots for automation should be based on individual preferences. But to achieve maximum profitability, choose options based on indicators. The Martingale method and order grid are too risky for beginners.

If you do not want to use automated forex trading programs, then it is rational to trust professional traders. You can transfer money to trust management for profit at most brokers. The so-called PAMM investment is aimed at ensuring that users without experience can transfer money for trading to more experienced participants in financial markets for a small commission.

Automated Forex Trading Software

There are two types of trading:

Manual

The first option does not raise questions for beginners - the investor independently opens and completes transactions.

The second way works differently.

Automatic

When using algorithms, a trader installs special programs for Forex trading in the terminal.

What happens next:

• The tool analyzes the market.
• Opens positions according to the rules laid down in it.
• Sets stop loss and take profit.
• Monitors the risk level of orders.
• Closes trades with profit or loss.

Such programs are called robots or advisors.

How to Choose the Right Software

There are many programs for automatic Forex trading. Most of them work with MetaTrader 4 and MetaTrader 5 terminals. For profitable trading, you cannot use the first algorithm that comes across. How to choose the right option:

Determine Needs

A trader must understand what he wants to get from special software. One needs only trading signals, the other needs a fully automated system. Someone analyzes the market himself and is looking for a utility to support transactions. It is important to define the goal in order to select the best tool in its category.

Read auto trading reviews

Traders have been using algorithms for a long time, so there are detailed descriptions and videos on the Internet for each instrument. It is especially important to study information on paid programs. Sellers promise high returns, low risks, and ease of use. But there are many scammers in the currency markets who implement inefficient algorithms.

Only reviews won't help determine the quality of the tool.

Conduct testing

After choosing the software before trading, it is checked on a real account. They use a strategy tester that will analyze the instrument on historical data or a demo account. This will show the effectiveness of the program and help you learn how to work with it.

Software varieties

The basic tool is a trading terminal used directly for opening deals and analyzing charts. It is created for traders with different levels of training and experience. Therefore, everyone chooses the option according to their needs.

For automated trading

The leader among terminals for algorithmic traders is MT4. Most of the robots that analyze the market and open deals instead of a specialist have been written for him. There are developers who create tailor-made Expert Advisors for any trading strategy.

For Frofessional Trading

Software for experienced investors is usually paid and includes features that are not needed for beginners. For example, in-depth technical analysis or volume indicators.

What programs are used

• Autochartist. Plugin for MT4 terminal. It scans not only Forex, but also other markets of the investor's choice. Designed to build graphic shapes. Gives trading signals based on technical analysis.
• ATAS. A powerful tool for studying order flow. Provides data on volumes, clusters, market profile.

For Newbies

For beginners, popular options are MetaTrader 4 and 5. Brokers offer training on working with these platforms. There are also many courses and free videos that detail all the features.

• If it is difficult to deal with the trading terminal, online platforms with reduced capabilities are used to open transactions. Usually these are the developments of brokers. IFC Markets, for example, has those lessons too.

Note: there are programs for testing trading strategies. Testing Expert Advisors, indicators and manual systems is an important part of trading. Testing new instruments on a real account is risky. For this, there are special Forex programs that allow you to quickly and safely test any trading strategies.

Automated Forex Trading Software Advantages

Before choosing a specific Forex automated trading system, you should study the advantages and disadvantages of this solution.

1. 24 hours working time

If you feel like you are spending too much time in front of a computer monitor and this is starting to negatively affect your life, automated Forex trading software is definitely for you.

Software for automatic work never gets tired, it does not need breaks for rest and personal life, it does not have a family and children. Expert Advisors is a robotic assistant that is ready to earn overtime every day without food, sleep or benefits. It is perfect for those who consider trading an additional income.

2. No Emotions

Forex trading is directly related to emotions, and the one who has less of them, as a rule, wins. Many people mindlessly enter into trades because of a string of losses. The desire to return lost money provokes irritability and inability to think rationally. Because of this, the trader commits rash acts, thereby aggravating his financial situation.

The most destructive emotions for a Forex participant are fear, greed and prejudice. Greed causes a trader to hold a position longer than necessary due to the desire to make more money. Fear has almost the same effect as greed, but in a different direction. The fear of losing your money does not give the trader the opportunity to make a profitable deal.

Automated trading systems are a really effective way to solve this problem, because when concluding transactions, the software is guided not by emotions, but by the chosen algorithm. Accordingly, errors due to the influence of the human factor will be excluded.

3. Great opportunities for beginners in Forex

Starting to work in the financial market, a trader needs to study a lot of information. With the help of algorithmic trading, you will have much more time for a gradual and detailed study of the basics of working on Forex.

The work of Expert Advisors will allow a beginner to make their first profit effortlessly, spending their free time tracking and analyzing the market, which is necessary for a better understanding of the specifics of the work. The software does not require the participation of a trader, so this type of work on Forex can be called passive income.

The software application is created so that traders can make a profit. This is its main task, and it will do everything possible to ensure that every transaction is successful. This is a rational and effective choice for new traders who do not yet have their own strategies.

4. Possibility to simultaneously control several currency pairs

With the "Forex robot" you will be able to track the currency fluctuations of several pairs at the same time. Whereas it is extremely difficult and time consuming to manually analyze several directions simultaneously, not to mention the fact that you will have to constantly work with multiple monitors in order to correctly track prices.

5. Automatic search for profitable offers

The software works on the basis of the algorithms that are embedded in it. You just need to enter brief information about the conditions under which you are ready to work, and then the system will automatically select the most profitable and profitable deals for you. All you have to do after that is just check your balance.

Working with the backtesting function

One of the advantages of algorithmic trading is the ability of the system to work with back testing. In other words, the program will carry out analysis, check the effectiveness of trading system signals and generate financial results. Based on this, the software will be able to guarantee the success of any transaction even before the transaction is concluded, which will protect you from unjustified investments.

Automated Forex Trading Software Disadvantages

1. Lack of motive to continue learning Forex

Many traders who use automated software have repeatedly noted that they gradually lose the desire to study the market deeper, follow trends and improve their Forex skills, as the system does everything for them.

2. The operation of the system needs constant updating

The Forex market is very dynamic. Some strategies that were successful in the past may not bring the expected result in the future. And if you refuse to participate in the auction and do not monitor the situation, you risk losing money, as the system algorithm will continue to work according to the old scheme, which is no longer effective.

That is why it is very important to carefully study the strategy based on which the software works and continue to monitor the market in order to be able to catch signals that portend losses in case of changes. Remember that the "robot" is not able to independently improve the algorithm of work in accordance with the new market conditions.

3. All algorithms are built on past experience

Even the most experienced trader is not able to guess 100 percent what will happen to the market in the future. That is why using the same trading model can be useless. In addition, the algorithms for programs themselves are written by people, which means that the human factor cannot be completely excluded.

Note: it is worth testing the software on a demo account before trusting it with real money.

If you do not know the programming language, you will have problems, because this skill is necessary to adjust the strategy. Although, many companies can do this job for you.

4. High price

Good software is expensive (and it’s never 100% otherwise, it would lose its purpose). And very often their price significantly exceeds the amount of the deposit, which the trader expects to use to work on Forex. And, given that not all beginners know the basics of programming, you will have to spend extra money on the services of a programmer who will correct the system in accordance with your instructions.

Some pay for complex services in companies that develop software. But, in this case, you have to pay a percentage for each transaction. And a beginner does not always have enough start-up capital to cover all expenses.

Bottom Line on Automated Forex Trading Software

Even if you trade manually, you should not refuse to use special software. It simplifies market research, tests strategies, helps to analyze and store working information. This saves time and allows you to focus on the main thing - trading.

Regardless of your level of knowledge in Forex trading - beginner, experienced - automation software can help you succeed.

Despite the obvious benefits of using automated forex trading platforms, these programs are far from flawless and the user should be aware that this software does not guarantee an infinite number of successful trades.

Yes, there are always potential risks when trading any market, but automation software can help you avoid serious losses. Most importantly, keep a checklist of the most important features you are looking for in a program, the level of customer support, and of course that no trading system can guarantee 100% profitable trades and that past results are no guarantee of future results.

Was this article helpful?

Yes

No

Learn Trading with IFC Markets

IFCM Trading Academy

4 simple steps to learn trading

Forex Trading Books

Forex & CFD Trading Tutorials Library

Forex & CFD Video Tutorials

Video Tutorials for Beginners and for working with Trading Platforms (MT4, MT5, NTTX)

Trader's Glossary

Trading Terminology: Glossary of Forex and CFD Terms