The Impact of Automation in the Forex Marketplace
Automated trading isn’t a new concept. In fact, it’s been around for many years. However, its application and use has become more popular these days. Also, the influence of so-called scammers or evil forex geniuses has made it difficult for the forex traders to handle everything on their own. That’s why, traders are relying more and more on automated solutions to ensure accuracy and to augment their chances of success.
The purpose of this post is to examine the impact of automation in the forex marketplace and how forex robots have literally omitted the need for human intervention from the forex trades.
Introduction - Just like many other industries, trucking, manufacturing, automation is having a major impact in Forex
Similar to any other field be it automobiles, electronic appliances or manufacturing, automation is having a major impact in forex. Wouldn’t it be amazing to have a robo assessing markets and trading on your behalf? All traders fantasize to find the top-notch trading system that requires less input yet delivers guaranteed profits. If you’re a newbie, you must be wondering what exactly an automated system is and what are the possible pros and cons of integrating this system into your trades?
What is an Automated Trading?
Simply put, automated trading enables traders to set specific instructions for both entry/exit that can be followed by a computer system without any further human intervention. These instructions can either be based on MA crossovers or can also depend on technical strategies that need an in-depth knowledge of the complex programming languages that is linked to the trader’s platform.
Sadly, most of the traders do not acquire basic market knowledge and this is perhaps the biggest reason why automated trading solutions are getting more and more popular. For newcomers, all that’s required is a functional computer with a working internet connection. Even if you don’t have colossal investment initially, you can still start your journey as a forex trader.
Examples of Automation in Forex - Forex expert advisors, or robots are playing a large role, as an estimated 40% of all trades are coming from automated tools
Did you know over 40% of all forex trades are coming from automated tools? There is no denying the fact that the role forex EAs or robots are playing in today’s fast-evolving and volatile forex markets is bigger than ever before.
One of the best examples of automation in forex is Expert Advisors also known as EAs. EAs are designed by highly experienced and trained professionals who jot down coding to assess trending market movements and also to carry out the trading process with trader’s involvement. These seasoned coders are selected based on their skillsets and achievements. One of biggest perks of using an Expert Advisor is that a person can easily avoid stress or anxiety while working as a forex trader.
Manual trading becomes more and more difficult, especially on the smaller timeframes, because robot execution speed is much faster.
What This Means for Day Traders - Manual trading becomes more and more difficult, especially on the smaller timeframes, because robot execution speed is much faster
Let’s face it, manual trading has become a thing of the past. Today, everyone needs fast results and accuracy. The forex world is not an exception. Especially, day traders find it difficult to handle their day-to-day trading tasks without any assistance. As day traders are required to work on comparatively smaller time windows, they’re not able to have an in-depth market research that can help them lower down their risk ratio at the same time increasing profit margins.
Also, human factors such as sleep, tiredness or desire to indulge in other activities reduces the time a trader can actually invest in the trading process. An automated robot, on the other hand, can work for 24 hours and that too without feeling any exhaustion. Plus, these are just instructions-inserted tools and are not affected by human emotions such as fear, greed or excitement. Once you move your manual trading system to automated procedures, you can sit back and enjoy constant stream of passive income rolling into your accounts.
It’s Not Over – There is Still a Role for Manual Trading, it is Just Becoming Minimized!
Although, automated trading has literally transformed the way forex traders were carrying out their trades earlier, there is still a group who keeps strong faith in manual trading procedures. While the role of manual approaches in the forex trading has been minimized, the biggest benefit you can expect from it is a great control and dominance you have over what you’re doing.
Also, as robots place trades randomly after watching out for trending movements, you can expect wiser moves while following your own strategy. But, it is not very easy to establish and implement a manual system in which you can strictly keep an eye on the market movements and price actions to get consistent and profitable results.
In conclusion, it’s entirely up to which particular trading system you select for your forex business. As far as trends are concerned, automated trading is obviously the future of forex trading and sooner or later all traders will eventually switch their manual trading approaches to automated ones.
This article does not necessarily reflect the opinions of the editors or management of EconoTimes.