Automated Forex Trading

April 18, 2009 by Admin
Filed under Automated Forex Trading

Why Forex trading?

While there are hundreds of different types of investments and new products emerging frequently Forex is unique in many aspects:

It is an extremely liquid market compared to the others;
Its daily trading volume is far greater compared with other markets;
It has much more players making it easy to enter and exit;
It is open 24 hours a day with the exception of Fridays from 6pm till 6 pm on Sunday;
Major trading centers are throughout the world making this market active any time of the day.

This is a market with a daily turnover of about $2 trillion according to the Triennial Central Bank Survey of the BIS (Bank for International Settlements).

Below are the daily averages of turnover on the currency market for the last 17 years:

$500 billion (April 1989)
$750 billion (April 1992)
$1.18 trillion (April 1995)
$1.48 trillion (April 1998)
$1.16 trillion (April 2001)
$1.88 trillion (April 2004)

These figures show that the daily volume of trade is increasing with years. With many changes introduced in recent years to the Forex market it became possible for individual traders with limited capital to enter this huge market.

One of the ways to enter is to develop sound trading and money management strategy proven to work on demo account for at least 3 months. This is a full-time job. It will take much more than 8 hours per day and most likely 7 days a week – it involves a lot of time and effort. You need to read books, develop your own strategy based on several factors, back test your strategy using platforms such as MT4 and then test it forward on demo account. For some traders who like to do everything themselves this might be a way to go.

Another way is to buy a ready-made program, a proven strategy or eve better a piece of software that can be loaded into a trading platform and enter and exit trades based on a proven and tested method that most likely took many months of intensive work to develop.

Automation is ideal for people who just don’t have time to develop a winning strategy. Automated robots are also capable to analyze different pairs at the same time and enter several trades. These robots can also trade when it is night time for you and you don’t want to stay awake the whole night to spot the ideal condition to enter the trade.

Risk management strategies are also incorporated in these programs or they can allow you to enter your own rules for money management – ones that you feel comfortable with.

Click here for an example of an automated Forex robot – all that you have to do is open a Forex account with a broker, download the demo and install this software. It will take the trades for you. Trade for about from 1 to 3 months on demo account till you feel comfortable with the system and then switch to real account.

In any case never risk the money that you can’t afford to lose.