Automatic Or Automated Forex Trading: Why Are Traders Using Automated Forex Robots?
This article is not a recommendation to trade any type of system.
Automatic or automated forex trading has been a topic much discussed on the internet.
The reason why many people discuss this method of forex trading are the following:
1. With an automated forex trading system, there is no need to take the lengthly time to learn a forex system.
2. These systems avoids the human error caused by incorrectly interpreting the market (especially with a discretionary system), interpreting the rules and placing trades.
3. With an automated system, you do not have to be available at the screen 24 hours a day to be able to place the trades that you are supposed to trade.
Note that any returns in a trading system in the past does not equal or guarantee future returns.
Automated forex versus traditional manual forex
Traditionally, there is an emphasis on learning how to trade a system yourself.
This does take time and dedication of course as you have to learn about the forex market, how to interpret forex chart patterns, how you system works including all its rules (such as when to move stop losses or take profits or move to breakeven), and how to efficiently place the trades at the exact timing you need to. Speed and accuracy is especialy important if you're trading say 5 minutely or minutely charts.
The key of course is to compare and have a look at systems, be they automated or manual to see that you're happy with their drawdowns and many other parameters.
With automated forex, you're using a system that is programmable and that can be traded in real time by a forex trading robot. Of course you have to monitor its performance as you do with whatever system you trade be it automatic with a trading bot or manual. This is to check that the performance is in keeping with the characteristics of the system and that you're happy with the overall results.
When checking out their system, see if you can see that the results published are not hypothetical performance results, but are in fact real time and live trading results. Also check the monthly profits and losses (either dollar or pipps by month, and win loss amounts), and the consistency of the system. Of course remember that past results are not necessarily indicative of future results.
When you have an automatic system, you'll be using a forex broker that can manage these automated trades (the forex signal trading from the program that generates the trades over each 24 hour period) as well. Check that you're happy with and familiar with the trading platform that the automated program trades with so that you know how to interpret its actions.
Click here to learn more about why people are using managed forex, a different form of automated forex.
All trading involves a high risk of financial loss, and the information on this site is for general information purposes only and is not financial advice in any form. See your own financial advice before taking any action.
All forms of trading involves risk of financial loss.
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