Automated Forex Trading Systems For Better Trades

Automated forex trading systems as a topic will undoubtedly fuel a spirited debate. Is manual trading or automatic forex trading the best system to capture profits in the forex market?

When the average trader is faced with a number of complex variables such as daily price swings, risk management, and multiple opportunities to make a trade, the tendency is to reduce and automate.

The trader needs to maintain a clear head and objectivity to build a stress free forex trading system. The psychological factors that influence trading may be more important than technical analysis or fundamental analysis when trying to make trading decisions.

Once the system is built, the trader has to have the discipline to trade it exactly to the letter. Such discipline seems to be lacking among all but the top 1% of traders. The rest of us need an automated forex trading system.

How much of the forex trading system should be automated is the question all traders ask themselves each day of the week. The answer is not a simple one, however, discovering a suitable answer will turn you into a profitable trader.

Any automated trading platform should include four vital components:

1. Forex trading signal:

Forex trading signals set off market entry and exit. The platform you choose should have adequate leeway and flexibility of signals to meet your system’s trading needs.

2. Forex trading system:

Forex trading signals are combined in a script for trade entry, trade management, and trade exit, also known as a automated trading system or trading engine.

3. Test Trading:

Completely developed forex trading systems are tested historically using tic data, and then on a forward looking basis using a live market price feed.

4. Live Trading:

All tested trading systems are ready for live trading status, where a reputable forex dealer executes trades in a real money account.

There is no secret formula or Holy Grail out there, but each person has his own secret formula. Create the trading system that fits your level of skill, time constraints, risk tolerance and lifestyle goals.

Some of the questions you should be asking yourself are; do I need an automated forex trading system? The answer is yes for a majority of traders. The answer is no if you’ve consistently made money trading forex without one.

Is the forex trading platform tic-driven? If not, your live trades are not likely to perform as well as your historical tests.

Whatever you ultimately decide, the selection of an automated forex trading system enhances your ability to be a winning and profitable trader.