If you are sick of your emotions getting in the way of a good trade it might be time to consider Automated Forex Trading or generally known as Copy Trading. Particularly popular in the forex market, Copy trading lets you mimic the trades made by winning traders. Although it sounds simple enough, here is some information that will help you decide whether to use Automated trading.
Automated Forex Trading is a method that allows the trader to select from a host of strategies and implement them without personally managing their account. The strategy that is chosen is executed on the trader's account. The goal of this type of automation is to keep the instincts and emotion of the winning trader while executing a trade strategy with the ruthless efficiency of automation.
Automated trading is extremely transparent than Robot trading. Some advantages includes :
The advantages of auto trading are numerous, but the trader must be careful to weigh the strength of each strategy individually. Each trader must have a goal in mind so that they can determine what each strategy will offer them. Also it is important to make sure that the strategy chosen has a long trade history. This is the only way that an accurate picture of the strategy performance can be ascertained.
Although it seems simple, there are disadvantages traders must be wary of. It is up to the trader to read the fine print on any performance records since not all results are from live trading. Sometimes strategies will also report only a partial view of recent results. Here are some other things to watch out for:
Automated trading is not offered by every broker. If a trader wants to use copy trading they will have to find a reputable broker that offers the service. There are also third-party programs that can work with a variety of brokers to place automated trades. This is a great way for a trader to get started auto trading without having to open a new account.
Whether they are using a third-party program or a broker that offers copy trading, the trader will have to go through each strategy individually and decide which ones to use. The trader must then authorize the broker to place the selected trades in their account. Confirmation should be provided by the broker or third-party program. There are then several parameters that need to be set. The trader must choose how many lots to trade on each signal and how many lots can be open at a time. Once done the trader can sit back and watch the strategy perform.
In the end, it is up to the trader to decide what strategy to use. If they want to use Automated Forex trading they must scrutinize all the statistics and manage the risk involved. As with any trading, they must be aware that there are no sure bets and markets are always changing. But, if they manage their risk vs. reward properly success will come.