Any participant in the financial market sooner or later begins to think about automated trading. Currently, there are many trading software and tools that can help you reduce the time spent on forecasting, analysis, opening/closing trading transactions. They are also called trading robots or Expert Advisors.
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What is automated trading and how it works?
With automated Forex trading software, you can analyze market data to make the right trading decisions. These Forex trading robot algorithms analyze market data, using the parameters set by the trader, find trading signals, and notify the trader of a trading opportunity. The trader then decides whether to open a trade or not.
Automated trading software has the following features:
- market analysis, including fundamental and technical analysis based on the trader’s trading system;
- automatic opening of trades provided that the predefined criteria are met;
- closing the trades according to the specified parameters;
- risk management by limiting the size and the number of open positions a trader has simultaneously at a given time.
What a trader should know if he wants to use trading robots
There are 3 key categories of trading robots:
- Multicurrency robots that do not use indicators. This tool allows automated trading using any currency pair. The multicurrency robot algorithms are based on the Martingale method, the order grid. The risk level is the highest here, but if luck is on your side, these robots can earn you huge profit%.
- Indicator robots. This type of Expert Advisors automatically finds overbought and oversold levels/trends/reversal areas and informs the trader, who, based on this knowledge, makes a trading decision.
- Scalpers. Automatic robots that trade with the minimum trade expiration time. Such robots are the best suited for scalping, where every second counts. If you need to quickly open or exit a trade, this robot will be your ideal assistant.
To choose the right expert advisor, it is important to consider your individual preferences. First of all, think, which trading style suits you best. By understanding the algorithm and what the EA is doing, how it’s trading, it will be easy for you to intervene if you notice that trading has gone in the wrong direction and became unfavorable.
How to use automated trading systems
To optimize your automated trading, make sure to consider these unspoken rules:
- before you decide to automate your trading, get some trading experience and learn how to trade manually;
- one should not blindly trust technology. Even if you have the best robot in your possession, it needs to be monitored and adjusted from time to time.
- to minimize technical failures, it’s better to run your automated trading systems through a server-based trading platform.
- buy or download your trading robot from trusted and reliable resources, who knows what bugs a free version may have.
And finally, remember that an advisor is just software and it cannot solve all your financial problems at once. It is best to purchase the automated trading software, it’ll be a more expensive option, but a safer one. Trading like any business requires some investment. So, invest in for the future and be patient – your investment will soon pay off.
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