In the past, trading Forex would have been exceedingly difficult. Even in the modern computing age, trading Forex is complicated. To maximize your profit, you will often have to be sitting in front of computers for hours on end, reading through countless charts and news articles. You would then have to make your trade at the absolute perfect moment. This is difficult for an experienced trader, let alone a new one.
This is why many Forex traders are starting to look into the idea of automated trading. This can result in far more sensible and profitable trades.
What is Automated Forex Trading?
With automated Forex trading, a trader will set up a trading strategy. You can think of trading strategies as rules for a bot. The trader is essentially teaching the bot when executing specific trades. The automated bot will look at the trading strategy, and if a Forex price is within the parameters of the trading strategy, the bot will automatically execute a trade.
The bot will execute trades, even when the trader is nowhere near their computer.
The Benefits of Automated Forex Trading
There are several different benefits to automated Forex trading. This is why almost 80% of all Forex trades in the United States are carried out via automated bots that have been programmed with trading strategies.
Perhaps the most significant advantage is that trades can be executed almost instantaneously. As you may well know, the Forex market can change incredibly quickly. If you are too slow to act upon your trades, then you may end up losing a lot of money.
Traders will also find that their trades are a lot less emotional. We are sure that many traders are a little bit of emotional trading on occasion. This means looking beyond the facts and trying to act on their ‘gut instinct.’ Some traders will even spend time considering whether a particular trade is right for them. If you do this, then you will lose money. Automated Forex trading will remove that emotion from it. The trade will be executed long before the trader can rethink the idea.
Because a trader will have to set the trading strategy rules themselves, many companies that provide automated Forex trading will allow the trader to backtest their trading strategies on historical data. This means that a trader will feel whether their ideas will work before tracking them to the live market. You can’t do this with manual testing.
If you plan to invest in Forex for the long term and have severe aspirations about making a lot of money, you must use automated Forex trading. No trader is successful without it. But, remember, the Forex markets never sleep. So, unless you set up automated trading, you will be missing out on some incredibly fantastic deals. Deals that could make you a lot of money.