A Beginner’s Guide to Automated Forex Trading

Automated forex trading has many advantages to offer to traders. The platform looks for signals that are specific, like price trends and discrepancies in spread, which makes an impact on the market. Then, depending on those conditions, it buys or sells. In an environment that is so liquid and high-risk, this minimizes the losses and maximizes the returns. But the system can only be as good as the strategy it uses. To learn more about automated forex trading, you can keep reading.

The Advantages to Automated Forex Trading

Hands-off trading, a method in which only minor changes are done over time to an investment portfolio. Automated forex trading offers the implementation of this technique, and you can set the program to the settings you think will be most beneficial for you, then the platform will be in charge of making the changes. These characteristics bring many advantages, especially for beginners:

• Logic over emotion: The key benefit of automated trading is that it’s done through logic instead of emotion. Factors like excitement or anxiety won’t play into the decision of whether to make a trade or not.
• It’s consistent: It’s consistent because a strategy won’t work unless they are followed consistently. This ensures that every time a particular condition is met, the trades you want will be executed.
• It’s constant: It’s working 24/7, allowing it to make a profit for you even when you’re sleeping, on vacation, or playing a match of tennis.
• It’s immediate: In such a liquid market, where changes happen so quickly that a beneficial opportunity needs to be done in minutes, trades need to be quick. As soon as a condition is met, with automated forex trading the system makes the trade.
• Multitasking: It’s capable of handling more than one account, something manual trading can’t do, as the human capability is limited.

The Disadvantages to Automated Forex Trading (And What to Do About Them)

Even though automated forex trading offers many advantages, it still has dangers that are specific to them. Scams, errors, and more are unique to this type of system. But the good thing is you can overcome all these problems, or at least minimize them.

• The strategy: We mentioned in the beginning that the strategy is what makes or breaks the utility of automated forex trading. You need to research thoroughly the strategy you’re going to use, and even test it on demos or testing tools. And the most important thing, is you need to make sure it matches the market you’re entering.
• The market: The automating of trading can cause the temptation to let the system do all the work, and forget about the account. You have to remember the market is volatile, so the constant checking of your trading criteria has to be done to accommodate the changes on the market.
• The leverages: Limiting your leverages as much as possible can ensure losses won’t be as bad. However, keep in mind they will also limit your profits.
• The community: The internet is filled with online communities where people offer all sorts of advice and strategies, as well as warnings about scams and other useful information.

What to Look For in a Trading Platform

You may have the most effective strategy in the world, but without a platform that suits it well, it won’t be as effective. Evaluate the platform you are planning to use the instructional videos and guides. Also, take a look at the demos if they offer them. When evaluating, keep these factors in mind:

• The reputation of the sponsoring broker
• The extra fees the company charges
• The tools it provides, and whether or not they suit your strategy
• Whether or not it generates reports
• If it offers the pair you are looking for
• The technical support they offer (as they can often be needed)
• The level of customization it allows
• If it gives access to trading communities
• If the promoted strategies accommodate the current market

These are some essential elements you will evaluate when looking for a platform, and based on your needs you can make the decision that will work best for you.

The Best Forex Trading Platforms for Automated Trading

The automated trading feature is relatively new, so not every platform offers it. We have picked the top four platforms with automated trading.

• AvaTrade: This platform’s automated trading system is called AutoTrader, and has been called a true revolution of the online trading market. Users are offered a wide range of strategies, and they get to buy the one that has the best performance in a determined period of time. Once chosen, the strategy is executed automatically, buying or selling accordingly.
• eToro: eToro has been around for ten years now, receiving many awards along the way, and regulated by entities like NFA, ASIC, and FCA. It currently has 5,000 traders.
• FP Markets: This platform offers an intuitive EA’s Algorithmic trading. This can be built by you, or you can download their rules and indicators.
• Axitrader: Autochartist is the name of their automated feature, and it scans markets continuously. Then, it recognizes trade set-ups, based on the level of resistance and support. When it identifies an opportunity, the trade is informed.  

Experts recommend automating your forex trading, only if done correctly. It offers not only convenience and consistency, but it makes the opportunity to generate profits more extensive and allows you to eliminate the emotion factor from the equation.

But we can’t stress enough, that the key is to do extensive research ahead of time for you to find the right strategy. Currently, more and more forex platforms are offering automated trading features, so if you’re planning on stepping into this world, automation might just be the thing you’re looking for.