Can automated forex trading make you rich? Well, it depends on your automated forex trading system. Many hedge funds and other entities that manage money through forex trading use some form of automated forex trading in their daily activities. Autotrading is common in the currency trading.
Big institutions have the resources to finance their inhouse development teams. Big institutions always had proprietary automated forex trading systems developed by their inhouse programming teams. These automated forex trading programs also known as Expert Advisors or Forex Robots were expensive costing like thousands of dollars and only wealthy individuals or big institutions like hedge funds could afford them. These automated forex trading systems were proprietary in nature and were not available to the general public.
However, the recent developments in computer programming have changed the field. Many private individual traders have also begun to adopt automated forex trading to execute their thoroughly backtested and highly optimized forex trading strategies. The recent advancement in computer programming has made it possible for professional forex traders to team up with a software expert to develop their own automated forex trading systems.
Advancements in computer programming has made these Expert Advisors cheap. The price of these Expert Advisors has come down to around a few hundreds that can be easily purchased by ordinary investors like you and me. Metatrader platform makes it real easy to program such type of Expert Advisors.
Recent advancements in computer programming has led to the development of trading platforms that allow an API ( Application Programming Interface) which connects the trader’s system to the dealer’s trade execution structure through the trading platform. So what is autotrading? You must have heard or read a lot about the benefits or advantages of automated forex trading.
The trading system needs to be ruled based and mechanical in nature with clear cut entry and exit rules. Once all of the trading rules and criteria are determined by the trader, programming an API can be relatively straight forward for anyone with programming experience. APIs requires programming skills on the part of either the trader or a programmer hired by the trader. After the specific trading rules and criteria are determined, the trading strategy is backtested with positive results.
The development of an automated forex trading system depends more on your trading skills as compared to your programming skills. When this occurs not only trades entered when predetermined technical criteria is met but trade exits in the form of stop loss and take profit rules can also be programmed into the API. Automated forex trading is almost as simple as flipping a switch to begin the trading process.
However, an automated forex trading system should be thoroughly backtested and forward tested to make sure the likely success of the autotrading system before being put on live trading. This creates an entirely self contained autotrading system. So autotrading can actually execute real trades on current real time market prices. When a predetermined signal emerges, the software actually places a trade automatically.
In fact, automated forex trading is perhaps the best way to achieve it if the trader has optimized and perfected this type of black and white trading strategy that runs devoid of human judgment. Any nondiscretionary technical trading strategy that has clear cut, unambiguous rules is a good candidate for autotrading. Automated forex trading effectively eliminates all human biases, errors and emotions in the trading process.
Every month you will come across a new forex automated forex trading system. The best two automated forex trading systems are FAPT and Ivy Bot. There are a number of successful automated forex trading systems now available in the market for the ordinary retail investors.