Automated Forex Trading Systems
Nowadays, fully-automated trading systems have become widely popular among Forex Traders. These systems are commonly called Expert Advisors (EAs) or Forex Robots.
An Expert Advisor is actually a small piece of software that plugs in a Forex Platform and trades the Foreign Exchange without human intervention. The most popular platform for automated trading is MetaTrader4, but other Forex Platforms can be used as well, such as JForex, CTrader, TradeStation, ZuluTrader, and NinjaTrader. Most commonly Forex traders prefer MetaTrader4 based on the variety of providers for automated trading.
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How does an Automated Forex Trading System Works?
After you purchase an Expert Advisor you can immediately install the system into your Forex trading platform. This procedure is very easy and it should take a couple of minutes. Almost all Expert Advisors are providing a manual with information regarding installation and configuration.
An automated Forex system can trade the market 24/5 without any input or other intervention by the user/trader. Actually, an Expert Advisor uses a mathematical model that tells your Forex Platform when to enter a trade and when to close an open position. This mathematical model is mainly based on the combination of technical analysis indicators and Price Action techniques. An Expert Advisor incorporates also complex algorithms in order to optimize the Money Management Process (spread control, volatility control, selective trading, trailing stop-loss, trailing take-profit etc.)
Important Tips for Forex Traders using Automated Systems
These are some important tips when using Automated Forex Systems:
(1) Use any Expert Advisor on a Demo Account before trading for real money in a Real Trading Account
(2) Read the manual and make sure you have the right configuration in accordance to your trading style
(3) Make sure that your Forex Broker allows the use of Automated Trading Systems and scalping
(4) Use Automated Forex Systems only with ECN Forex Brokers offering tight spreads and fast execution without re-quotes
(5) Combine the use of an automated system with the use of a Forex Trading Rebate. An expert advisor can execute tens of trades intraday and thus a good rebate can make the difference
(6) Don’t combine the use of an Expert Advisor with other trading activity in the same trading account. Use a separate account. If you trade in the same account both manually and automated you may seriously confuse the Money Management System of the Expert Advisor
(7) If you can’t afford to have your PC turned on, think about a VPS hosting service or search for a broker that offers a VPS service for free: ► HotForex Free VPS service
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