MANY WOULD-BE forex traders think that it would be wonderful if they had a robot who could trade for them and earn them guaranteed profits. This is why forex auto trading is becoming so popular. A lot of investors have been dreaming of finding an ideal computerised trading system that allows them to trade automatically with guaranteed profits with minimal trader input. Yet, although several auto trading systems are available, none are entirely perfect.

So, what is forex auto trading? Is there such a thing as a truly profitable system? Here, we take a look at the pros and cons of forex auto trading so you can decide whether they’re a good choice for you.

Automated trading systems – what are they?

Automated trading systems are a form of program that enables investors to set their own rules for exiting and entering trades. Traders are able to enter rules for entry and exit as well as money management into the trading system so that the computer can then perform trades and monitor them on the investor’s behalf. After the rules have been programmed, the computer is then able to carry out the trades automatically following those guidelines.

A lot of people who are keen to become involved with forex trading lack knowledge about how to get started, so it isn’t too surprising that automated systems are so popular. They’re also very accessible. All you need is a PC or laptop and an active internet connection – no major investments are needed to get your trading underway.

Auto forex trading – how does it work?

Both experienced traders and complete beginners can utilise automated forex trading systems that can make trading decisions for them. The most effective auto forex systems are programs designed to analyse market activities and the forex price charts. This software assists by spotting vital trading signals such as spread discrepancies, news that may impact on transactions, currency fluctuations and patterns of price instability while carrying out your chosen trading activities to your losses can be kept to a minimum. Even better, the system can identify the most profitable currency pairs before placing a trade on them. Perhaps the biggest advantage of all is that automated systems are entirely consistent and unemotional when making trading decisions, something that humans often struggle to achieve.

What are the risks of auto forex trading?

Although auto forex trading systems are a helpful tool, they certainly aren’t foolproof. Most robots will only trade within certain parameters. They make a specific number of pips within a tight range and do so at the slowest times on the market. They will regularly set several pip targets and they may even not use a stop-loss. They’re said to be successful since, usually, they make a profit with every trade – albeit often only a small one. If a strong and unanticipated range breakout happens though, the small profit that has been made will be completely wiped out. Luckily, most of the best automated trading systems display warning messages if there’s a chance of failure to seek the investor’s approval before making the transaction.