Forex auto trading is a slang term for automated trading on the foreign exchange market, wherein trades are executed by a computer system based on a trading strategy implemented as a program run by the computer system. The trading strategy consist of a set of criteria, and is typically programmed, but can also be created by using a method combining the set of criteria visually without programming. The set of criteria used in a trading strategy for Automated Trading are mostly based on technical analysis.
Automated forex trading uses a computer program that the trader "teaches" to make decisions based on a set of signals derived from technical analysis charting tools. The signals create a buy or sell decision when they point in the same direction. In an automated forex trading system, the trader must teach the software what signals to look for and how to interpret them. It is commonly observed that people who get involved in trading don't actually have much knowledge about the trading process.
For this reason, more and more people are choosing to use automated trading options so that they do not have to trade manually. Automated Forex trading systems are available in the form of expert advisors (EA). These are created by highly skilled and experienced professionals that write algorithms to analyses, market trends and perform the trading process. They are chosen based on their level of knowledge and accomplishments to avoid panic or anxiety on the part of client traders.
Blindly trusting the sales pitch is probably not the best idea, especially when you are talking about a serious business like forex trading. Forex trading systems are an expensive investment. A real forex advisor will advise you to exercise caution when making that investment and not try to sell you one of these systems to begin with. What you see in the sales pitch can often be fabricated results over a short period, which means that the software system may be unsustainable over a longer period of time.
Though retail investors can make profits using in-built technical indicators and robots on automated trading platforms, it is advisable to understand the science behind trading strategies to be able to understand the risks involved in the highly risky forex market. In most cases, trading systems are provided free of charge with a promising description of the functionality. So, relying on EAs alone is irrational, despite all the advantages. Traders who have gained sufficient expertise and know all ins and outs of trading strategies begin trading on their own, determining the currency rates' dynamics on short or long time frames.
