Automated Forex trading

The concept of autotrading begins to interest most novice traders after several unsuccessful attempts at independent trading.

Automated Forex trading is trading using mechanical systems, specialized programs, or trader terminals that fully automate the process of opening trades, from technical analysis to opening and closing trades.

Currently, this type of trading is carried out using two options: automated trading advisors or specialized terminals that can be configured to receive signals to open trades.

 

In practice, trading with expert advisors has become the most common method, as these scripts can be installed in a standard trader's terminal and there is a wide selection of similar programs, including free ones. Unlike expert advisors, specialized terminals are almost always paid, and sometimes you also need to pay for the signal delivery.

Automated trading with advisors has its advantages and disadvantages, which we will discuss below.

Advantages of Autotrading.

1. Fully automated trading – the trader's involvement is only required for installing and configuring the script. Afterward, the program automatically analyzes the market, draws the appropriate conclusions, and opens orders. When certain conditions are met, the trade is closed profitably or a stop-loss order is triggered. Particularly intelligent advisors can even set their own parameters.

This gives the trader ample free time to spend as they see fit.

2. No specialized knowledge required – typically, the installation and configuration of the advisor is fully described in the accompanying instructions. Therefore, automated trading doesn't require a thorough knowledge of technical or fundamental analysis; a basic understanding of Forex is sufficient.

Disadvantages of auto trading.

1. Additional costs – more or less decent automated trading programs often cost money, with prices starting at $500, which is far from affordable for a beginning trader.

2. Risk – like any program, a Forex advisor can malfunction or misjudge the market situation. While errors in a regular program simply cause discomfort, every mistake here costs money.

3. Special conditions – some programs require a certain deposit size for trading, others only trade overnight, and still others only certain currency pairs. These additional conditions don't always align with a trader's wishes and capabilities, which creates some difficulties when using the robot. 4. Broker restrictions – more

than half of brokerage companies do not allow the use of automated trading on their servers and severely punish those who violate these conditions.

In my opinion, the popularity of automated trading is more due to the hype of easy money on Forex than to the actual effectiveness of this type of trading. Therefore, before choosing this type of trading, you should think carefully.