Advantages and disadvantages of automated Forex Trading

ByRussel Rashid

Automated forex trading has become a practical common trading currency among all kinds of forex traders, in particular new operators. The flexibility and scalability of the process also has forex most profitable and popular.

What is automated Forex Trading?

Automated forex trading is quite simply, by using automated software currency pairs trading. The software scans the son market, price changes, news, graphics and model training constantly and uses complex calculations using current market data and passed to find profitable opportunities. These programs use generally sophisticated traditional indicators and monitors model to find model training, background, tops, crossovers, pierced, changes in trading volume, spread the gaps and arbitrage opportunities. On the search for the opportunity, the software generates signals and place automatically buy or sell orders. These automated trading systems are also called algorithms, black boxes, or robots.

The goals of each trader, trading style and risk tolerance differ from others, these systems require some user defined the predetermined rules to find an opportunity and to place trades. Rules can include anything to find differences in propagation to set the size of the order for a currency pair. The features and configuration of these systems are also significantly different and the way they interpret the market flows are also significantly different. There are algorithms on the web and installed system today.

Benefits of automated Forex Trading

1. Without emotion and Trading consistent: since it is very low, if not human interference in the interpretation of the data and decision making, basic human emotions such as greed and fear control any trading decisions. Trades will be more reasonable and consistent.

2 Time and Trading by proxy: traders can exchange around the clock and practically can go anywhere they want during trading hours. Most commercial software are fully customizable to make it personalized to your needs and commercial style.

3 Faster Trading and quick capitalization: with automated systems, purchase or sale orders are placed instantly. Because the criteria are laid down in advance orders can be placed so fast to take advantage of the situations of dominant market.

4. It is for speculators, the arbitrators and the beginners: speculation and arbitration must rapidly response to market movements both is almost impossible with manual software trading. Also for new traders with not a lot of exchange of knowledge and experience in the market, auto trading may be a better option to test strategies, making profits and avoiding human emotions.

Disadvantages of automated Forex Trading

1. High cost and from the outset the investment: most advanced automated trading systems are expensive to buy or presents itself as a package with a few prerequisites to respect. And the operator must invest in the creation of the commercial infrastructure that include one or more Internet computers, high-speed backup backup and other power systems.

2 Not so easy to understand and use: as a new merchant or for one with not much technical knowledge cannot suffer from negotiating with multiple Windows systems. Also set the rules of rights and using the correct settings can be a little difficult.

3 Trades are as good as the rules: such as analysis and operations are done according to the rules defined by the merchant, the trades reflects experience of knowledge and the commercial market. Fore example relaxed rules can generate many or false trading signals and more stringent rules can generate no signal at all.

4. Trading systems differ considerably and the forex brokers charge differently for automated trading. Also the automatic trading is generally limited to a small number of currency pairs very popular.

This article is written for financial brokers East, the main broker in advanced placement forex trading software with lots of features in line Middle East currency trading.