Forex Automated Trading
Automated Forex Trading, also known as algorithmic trading, is conducted with the help of Expert Advisors (or EA’s). Expert Advisor is a program designed for full or partial automation of trading processes. The level of automation can vary from assisting a trader in making decisions to offline placing and canceling orders. Automated software can also perform additional functions such as control of orders placed, trade monitoring, and analysis of the market conditions like volatility and liquidity. This type of trading routine is called auto trading.
Expert Advisor software is written in MQL4/MQL5 and is designed to interact with MetaTrader 4/ MetaTrader 5. It is also possible to add trading bots to the TickTrader platform. EAs respond to the price action to send trade entry and exit orders to the market for execution.
How does automated trading software work?
Auto trading technologies are mainly used for technical analysis. Let's consider a basic example. A trader codes or purchases an automated trading program for cryptocurrency exchanges that buys one currency against another under a specific condition — when the shorter-term MA (moving average) crosses above the longer-term MA. Also, the trader can instruct the program to sell a certain currency when the price reaches a specified level.
After setting the input data, the program should work without human intervention.
Who can use automated Forex trading software?
Automated expert advisor services are now available to any Forex trader. Initially, the advantages of auto trading were exploited by institutional and professional traders to navigate highly liquid Forex markets. Right now, robot trading is also available to the retail segment, including crypto traders.
What are the advantages of automated trading?
- Unlike humans, expert advisors are not influenced by emotions. Decision-making is based entirely on calculations, which makes trading more efficient.
- A well-developed and optimized automated system for trading helps you to facilitate some calculations and increase the probability of profitable trades.
- Automated trading systems can monitor and trade multiple trading instruments simultaneously 24 hours a day.
- You can adjust the EA settings or revert to manual trading at any time.
- You can also use auto trading to copy trades of successful traders. Therefore, there is no need to analyze market conditions by yourself.
What to be aware of while using automated trading?
- It is impossible to completely exclude control over transactions, due to possible communication issues, power outages, and other technical problems.
- An EA that can replicate the full scope of analytic capabilities and flexibility of a human trader is yet to be found.
How to start Forex auto trading?
There are simpler ways to explore auto trading than creating your own bot from scratch. FXOpen provides opportunities for accessible auto-trading via Myfxbook, ZuluTrade, and signal subscriptions through MT4/MT5 interfaces. With these services, you can explore auto trading without the risk of making beginner mistakes. Also, you can just observe successful trades and learn from them.
Myfxbook AutoTrade allows you to engage in mirror trading and replicate strategies and trades of the most profitable traders, and also includes risk management tools: you are free to refuse an unprofitable strategy at any moment and set a level of balance or drawdown. With MT4 terminals installed on its servers, Myfxbook is able to exchange signals through expert advisors. The service is completely automated and does not require a VPS.
ZuluTrade is a service that uses signals from top Forex traders to manage your trades. You just need to choose a trader whose trading style you prefer, and ZuluTrade will copy their strategy in your MetaTrader account via ZuluTrade's own VPS service.
Does auto trading really work?
Yes, automated trading works. As mentioned above, professional traders have been using auto trading for quite a while. And if you're going to make a living with trading, then you'll have to automate some processes one way or another.
What is auto trading on MT4?
Auto trading with MT4 is auto trading using the services of expert advisors. Expert advisor is a trading bot designed by someone else and has some basic configuration. After acquiring the bot, the trader can adjust it to the desired parameters and market conditions.
Platforms like Myfxbook have servers with MT4 terminals installed on them, providing signals exchange through expert advisors.
Is automated trading profitable?
First and foremost, the user of an automated trading system must be a good market analyst, keeping abreast of business events and being aware of how they will later affect prices. A trader's inexperience often leads to loss of capital even with the use of an expert advisor.
Do trading bots make money?
As mentioned in the previous paragraph, a Forex trading bot won’t earn money for a trader without the trader's involvement. On the other hand, a well-configured trading advisor will save a lot of time for the trader and relieve them of the constant need to stare at the screen to perform every single trading operation.