ways to automate your forex trading, so that you can benefit from the
returns that forex gives you, without the need to trade yourself!
Is this where the future of forex is heading? Both for the forex
trader who doesn't mind trading, to enable him to trade a second or
third system, as well as for the trader who's actually not that
interested in trading on a daily basis?
Well, it seems to me that automatic forex trading systems are on the
rise, and more and more systems are becoming available over time.
By the time you finish this article, you'll have a very good idea of
the benefits that automatic forex can give you, and how to look
further into this new trend.
Automatic forex trading may be classed into two types:
The first type, is automatic forex trading through managed forex.
That is, a forex trading company that uses automatic trading through a
trading robot to ensure that their system is traded exactly as
intended. In fact many systems designed for robots can only be
practically traded by robots rather than a human team, as you'll see.
The second type of automatic forex is the use of a forex trading
program with an ability to automatically place trades, such as with
WealthLab.
To do this, you'll need someone with programming skills to program the
system into WealthLab or other software, and a connection to a forex
platform that accepts automatic order placements by the trading
program.
With either method (though the first method is the one that doesn't
require programming skills) these are the benefits to automatic forex
system trading:
1. You don't have to trade yourself, which frees up your time. This is
one of the main benefits. For a trader who actually likes trading,
this means that he can continue to trade one system, and at the same
time trade a second or third through automatic forex. For those who
are not really interested in actually trading on a daily basis,
they're able to profit from forex, and concentrate their efforts on
their other businesses.
2. The trades are able to be taken at anytime of the day or night. The
performance of a system may rely on the fact that you actually take
the trades generated by the system. Depending on the time zone and the
time available by the trader, it may be impossible to take the trades
that we're supposed to trade and hence compromise the profitability of
the system significantly. Automatic trading by its nature, is able to
overcome this problem.
3. You're able to trade multiple forex systems and strategies. You can
trade multiple systems with the same automatic forex provider, or do
so by choosing more than one provider. And because their systems are
likely to rely on different indicators, trade different currency
pairs, and also trade different time frames, you're diversifying your
risk. The reasons why you want to diversify risk is that you want to
smoothen out your equity curve and reduce drawdown.
4. There are no longer any issues with trading psychology. Trader
discretion, if not based on proper practice and alertness, can causes
a system's performance to decrease significantly, and this is not an
issue with automatic forex trading. Of course your skill now comes in
choosing a good automatic system to invest in.
5. You can trade systems that may be impossible for a human to trade.
A human can only watch and trade a certain number of currency pairs at
a time. With automatic forex, there are systems for example that has a
high frequency of trades, traded on tick data. Therefore trading is no
longer limited by how easy it is for a person to physically trade it.
6. You also leverage your time because you don't have to spend time
learning how to trade a particular system. Learning a particular
system takes time and effort, so there's a lag time between deciding
on a particular system, to getting to the point where you know the
system rules, and then actually paper trading then live trading that
particular system. You could have been making profits in forex in the
meantime.
7. Finally, you don't need to spend any time, or have any skill in
designing or backtesting a trading system, as it already has been done
for you. In fact with the different automatic forex providers around,
you're taking advantage of many types of forex systems that are
available.
Make no mistake about it. Passive trading (and other passive forms of
investments) will get more popular, as it frees up your time to enable
you to focus on other income generating business, or to do whatever
else you need to do with your time.
So it's important to choose a good automatic forex trading system, so
that you'll benefit as much as you can from automatic forex system
trading!
Achieving Financial Independence with Forex: http://www.pipomavens.tk/
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