The short answer is yes, automated forex trading systems do work and can generate profit.
Now for the long answer, which is not THAT long, we wrote this simple guide to answer all the questions that you might have regarding automated trading.
So, let’s begin.
What is Automated Forex Trading?
Automated Forex Trading, also known as algorithmic trading, is a computer program that allows traders to turn entries, exits and other risk management rules into an automated system. Once the trading system is set, your automated trading forex program will execute these orders automatically and monitor them.
Why Do You Need an Automated Forex Trading Strategy?
First, to get rid of many sleepless nights in front of the screen.
Second, automated trading forex programs reduce the emotions in trading and work more efficiently than a human ever could.
What is the Best Automated Forex Software ?
One of the most fascinating features of MetaTrader 5 is algorithmic trading. Its user-friendly interface allows traders and programmers with any skill level to develop, debug, test and optimize automated trading systems.
How to Build an Automated Forex Trading System?
Before building one, we highly recommend you go through these 3 steps first:
- Every person has to have a skin in the game before using or developing any automated trading forex program. By that, we mean you need to learn how to trade (if you’re new to trading), practice, win, lose, make mistakes, get better, repeat mistakes, get even better… Until you grasp the concept of trading and what it is all about.
- Create a detailed trading plan by defining your entries, exits, stop-losses, your risk/reward ratio, the time frame, and the strategy you’ll be using. After you put it to the test, give it some time and you will know if your trading plan is working or not.
If not, go back, review, find the problem, tweak it and try once more.
If it’s still not working, then the strategy simply doesn’t have an edge, just change it and look for a better one.
- This step is the most important one, turn YOUR profitable trading system into a computer program. After your trading process shows consistency in generating profits, then it’s time to take it to the next level. This step can be intimidating if you don’t know how to code. For that reason, we recommend hiring a developer which will give you a minimum headache, with minimum issues in a minimum amount of time.
Automated trading systems work exceptionally well for traders who have no time to trade but still want to take advantage of the price movements to make some money.
However, most traders will look for the “easy way” to make money with trading robots by randomly buying or borrowing a ready-made system, but unfortunately that path is a sure way to lose money.
You have to learn trading as a craft. Market cycles are always changing, so strategies don’t last forever, they always need to be tweaked according to market conditions. So, if you’re not a REAL trader that understands how markets work, how are you supposed to adapt to different market environments?