Forex Automation Software #3 Tips about Automation Software (2024)

If I told you that there was an intelligent, unemotional, logical forex trader who is always on the lookout for profitable trades and who executes trades almost instantly when the opportunity arises and then puts the profits into your account, wouldn’t you want to hire such a person right away?

Well, with automated forex trading software, you can have all of those qualities and more. Also known as algorithmic trading, black box trading, robo or robot trading, automated forex trading programs offer many advantages.

They are designed to operate without the presence of the trader, scanning the market for profitable forex trades using preset parameters or parameters programmed into the system by the user.

In other words, with Forex automation software, you can turn on the computer, activate the program and walk away while the software operates for you.

How does Forex Automation Software Work?

Automated currency trading software works with a program that looks at currency price charts and other market activity over multiple time frames. The software identifies signals including spread discrepancies, price trends, and news that may affect the market to locate potentially profitable currency pair trades.

For example, if a computer program using criteria set by the user identifies a currency pair trade that meets predetermined profitability parameters, it issues a buy or sell alert and automatically executes the trade.

The Advantages of Forex Automation Software

One of the best things about automated forex trading software is that it takes away the emotional and psychological factors that affect your trading decisions and replaces them with a cold, logical way of looking at the market. Even novice and experienced traders can sometimes make a trade based on some psychological trigger that defies the logic of market conditions. With automated trading, these all too human errors of judgment simply do not occur.

Confidence is not ‘I will profit on this trade.’ Confidence is ‘I will be fine if I don’t profit from this trade.

Yvan Byeajee

This is because the automated software is intended to make your trading decisions unemotionally and consistently, using the parameters you have preset or the settings you have pre installed. For currency speculators who do not trade based on interest rates, but on currency spreads, automated software can be very effective, because price discrepancies are immediately apparent, the trading system reads the information instantly and a trade is executed.

Other market elements can also automatically trigger buy or sell alerts, such as moving average crossovers, chart setups such as triple highs or lows, other indicators of resistance or support levels, or possible breakouts of highs or lows that indicate a trade signal.

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An automated software program also allows traders to manage multiple accounts simultaneously, an advantage not readily available to manual traders on a single computer.

Serious traders can also benefit from automated software, as their other interests, obligations or occupations may not leave them the time they need to study the markets, analyze charts or keep an eye on events affecting currency prices. This means that, day or night, the program works around the clock without the need for human supervision.

Selecting a Forex Automation Software

There is no one size fits all approach to forex trading, and the same goes for your automated software: each program has a number of advantages and disadvantages.

Of the numerous automated forex trading programs offered on the market, many are excellent, even more are good but not complete in their features and benefits, and a few are less than adequate.

Although some companies advertise “over 95% winning trades,” consumers should verify the validity of all advertising claims. In some cases, software vendors provide authenticated historical trading results to demonstrate the effectiveness of the programs they sell. However, it is important to keep in mind the oft used disclaimer: past results do not guarantee future results.

Below, we have outlined some of the key selection criteria for operators considering automated programs.

1. Tailor Forex Automation Software to Your Needs

Automated trading systems vary in speed, performance, programmability, and ease of use. Therefore, what serves one trader well may not be acceptable to another.

For example, some traders will want a program that generates reports or imposes stops, trailing stops and other specific market orders. Real time monitoring is also a “must have” element in an automated system. Other traders, especially beginners and less experienced traders, may prefer a simpler “plug and play” type program with a “set and forget” feature.

Remote access is also essential if you travel frequently or intend to be away from your computer for an extended period of time. A web based program may be the most useful and practical means of meeting the needs of a roaming operator, as they are guaranteed to work with a basic WiFi signal.

Instead of generic WiFi, Virtual Private Server (VPS) hosting is a service worth considering for the serious Forex trader. This service provides extremely fast access, isolates the system for security purposes and offers technical support.

2. Fees and Guarantees

Transparency of fees is a key quality to look for in providers, as some companies charge commercial commissions and additional fees, which can undermine your profitability, so check the fine print in your user agreement.

Companies may also offer programs with a money back guarantee after purchase and for a specified period of time. Therefore, if the user decides that the program does not satisfy them, these firms will allow them to return it for a refund.

It is also worth checking the Internet for customer reviews of many of these programs to get an additional viewpoint on their strengths and weaknesses. Some programs offer a free trial period or other incentives for purchase, while other vendors offer a free demonstration to familiarize the user with the program.

3. Test Drive

Since Forex automation software can be an expensive investment, make sure that firms can provide videos of their software programs running in the market, buying and selling currency pairs. In addition, it may be helpful to request screenshots or videos of account activity, including prices of buy and sell trades, timing of execution, and posting of profits.

When trying out a new computer system, run the tutorial or training function to see if it is adequate and answers all your questions. You may need to call the help desk to get answers to complex programming questions, such as setting up buying and selling criteria and using the system in general. If a “Help” link is provided, determine how easy it is to navigate and how useful it is. Some of your questions may not be answered through the information in the help section, and knowledgeable assistance from the system provider will go a long way toward making your trading experience smooth.

Companies may also offer a free, no obligation trial of their software so that the potential buyer can determine if the program fits their needs. If this is the case, test the installation of the program and the functionality of the user experience. Also make sure that the software is programmable and flexible in case you want to change any pre installed default settings.

Forex Automation Software Purchase Checklist

Below we have summarized some of the key points in the form of a checklist for you to keep in mind as you go through the process of buying Forex automation software:

• The most popular automated software systems will trade the major currency pairs with the highest volume and liquidity, including USD/EUR, USD/CHF, USD/GBP and USD/JPY.
• Trading approaches will vary in terms of risk, with programs aimed at scalping a few pips on a trade or placing larger bets. The user should be able to dictate which approach to use, and the strategy can be adjusted in either direction.
• Customer reviews of the product posted online are a good source of information about the software. It is highly recommended to read them before buying.
• Price competition currently favors the consumer, so shop around for the best deal, but don’t sacrifice quality for price. Bargain package prices range from hundreds to thousands of dollars.
• Look for a high level of technical and service support. This is essential for traders of any experience level, but is especially important for beginners and newcomers.

Beware of Forex Automation Software Scams

Scams are a sad fact of life in the market for Forex automation software, but you can avoid them by doing your research on any company. Check the Commodity Futures Trading Commission (CFTC) and National Futures Association (NFA) websites for consumer alerts.

On the CFTC website, this information is available by clicking on the link under consumer protection. The NFA site has a database of registered member companies.

Wrap Up

Whatever your level of forex trading experience beginner, experienced, or veteran Forex automation software can help you succeed.

Despite the obvious advantages of using automated forex trading platforms, these programs are far from infallible and the user should be aware that this software does not guarantee an endless streak of successful trades.

Yes, there are always potential risks when trading in any market, but automation programs can help you avoid serious losses. Most importantly, have a checklist of the most important features you are looking for in a program, the level of customer service and, of course, that no trading system can guarantee 100% winning trades and that past performance is no guarantee of future results.

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