Automated Forex Trading System - Is It Possible? by marie ann felipe

The concept of automated Forex trading system is mind-catching. Before the automation of the Forex market, exchange-traded futures

market was the first to switch on automation. Then, the traders on the

Interbank spot FX market decided to catch up with the latest trend and

moved too to the new system.

Automated Forex trading system enables traders to execute their trade

on spot Forex market automatically and anytime of the day, based on

existing technical indicators and custom trading rules. There are

various features included in the automated trading system, such as:  Automatic trailing stops especially if the trader is losing in

a particular trade position;  Account equity management;  Stop and/or limit orders;  Discretionary market orders; and  Various technical analysis indicators within your discretion

for enabling trend-following systems. Automated Forex trading systems supports most of the following

indicators (the technical support will depend on the technology used

as well as the available features of the system):  WMA (weighted moving average);  EMA (exponential moving average);  SMA (simple moving average);  VMA (variable moving average);  TMA (triangular moving average);  TSMA (time series moving average);  WATR (wilder's average true range);  VHF (vertical horizontal filter);  Standard deviation;  Trailing stops;  Mass index;  Fixed limits and stops, and others. The success of the automation process to the Forex market is

attributed to several factors, such as the following:  Its ability to perform or execute trades in real time. Because

of the automation, a trader can close trades within a few

milliseconds. It is impossible in manual systems, as previous trades

are normally closed after several hours. In addition, there are also

instances wherein a trader incurs several losses in a row that

prevents him from making any fresh transactions. Thus, with automated

Forex trading system, this problem could be avoided.  Its ability to greater diversification. With automated trading

system now in place, a trader can trade in various local as well as

international markets within varying time zones. In other words, you

can place trade or close deals with different traders from various

markets around the world even at the middle of the night.  Its ability to analyze short-term data. This feature is not

available in manual trading system. Thus, traders using automated

system have the bigger advantage since they can predict market trends

in less than an hour. If you will consolidate the features as well as the benefits of

automated Forex trading system, it will give you a solid conclusion:

with the Forex market on automation, you will be able to place more

trades on a single day, thus increasing the average volume trades

daily.

To further clarify the conclusion. Let us take the following scenario:

If you are trading using the manual system, you will notice that it

takes time before a trader confirms if he will accept your deal or

not. He will look on the market condition first as well as the

exchange rate of the currencies that you are trading with. Thus, if it

takes time before a transaction will be finalized; there would be

fewer trade volumes.

Now, if you are using the automated

href="http://forex.makemoneyfromscratch.net/blog/">Forex trading

system , the evaluation of exchange rates and market conditions

could be done within a few minutes, since Forex data are now updated

in real time. Probably after less than an hour, you will be able to

take your position whether you will push through the deal or not. If a

Forex transaction per trader is averaging within an hour, a single

trader can place as much as 8 trades within the regular trading hours

(if he is following the day trading schedule) and additional trades

beyond the regular trading hours. There are thousands of traders in

just a single market who can place such average number of trade per

day. Combining it with the number of Forex markets around the world,

the figure is just huge enough.

In addition, the technology is changing continuously, thus there is a

tendency that the average number of trades per day will increase, thus

a possibility of increased trade volumes on daily basis. With faster

trade execution, that is a certain possibility.

Be thankful, the Forex market is now at the helm of automation.

Transactions are now faster, and earning money through Forex trading

is now easier.