The Advantages of Using an Automated Forex Trading System
Most of the forex trading systems you will get to see in the forex market are automated. May be there is a point in understanding how this came about. The exchange-traded futures market was the first to get automated. It was only after that the traders on the spot forex market decided to move on to automated system.
How does an automated forex trading system help?
The great advantage is that it helps forex traders to execute their trade on spot forex market almost automatically and at any time of the day. Of course existing technical indicators and custom trading rules continually assist the trading activity. Automated trading systems are blessed with several great features such as:
- The feature of automatic trailing stops to help the trader if the trader were loosing a particular trade position. There is no ambiguity in your account at any point in time.
- The facility of making stop and/or limit orders.
- Proper account management systems that lets you see the status of your account in real time.
- The ability to display various technical indicators simultaneously. Of course this will depend on the technology and available features of the system, but by and large most automated trading systems have the ability to display the following technical indicators namely: Weighted Moving Average (WMA), Exponential Moving Average (EMA), Simple Moving Average (SMA), Time Series Moving Average (TSMA), Standard Deviation, Trailing Stops etc.
What are the factors that make the automated systems reasonably successful?
- The automated forex trading systems can perform and execute trades in real time. For example a trader could close a trade within a few milliseconds. In a manual system this is not possible as previous trades might take hours to close.
- Perhaps the greatest feature of an automated system is its ability to allow you to work between overlapping and different time zones. So you could place a trade or close deals with various traders working in different markets around the world, and that too in different time zones at any time of the day say even in the middle of the night.
- In automated system can analyze short-term data in a better way. Therefore, market trends could be predicted in less than an hour by traders using automated system. You cannot do these things using manual trading systems.
- An automated forex trading system allows you to place more trades in a single day. This leads to an increase in the average volume traded daily in forex markets, and for the individual trader it could lead to more profits.
Imagine for a moment that you were using a manual trading system. Once your trader gets your call to place an order he would take a long time to confirm if he would accept the deal or not. That is because he will have to look into the exchange rate of currencies you are dealing with and this process takes some time. What this means is delay in placing and executing orders apart from realizing fewer trade volumes.
On the contrary if you were using an automated trading system the exchange rate and market conditions could be instantaneously ascertained as they are always updated in real time. So you could push your deal straightaway. Convenience, dependability and almost instantaneous execution of trades are some of the striking features of an automated forex trading system.
You must be thankful that forex market is now fully automated as that affords you faster trade execution and the ability to earn good forex money pretty fast.