Two decades earlier, it wasn’t very easy to enter the forex market without someone’s assistance and guidance. But today, it’s far more convenient to start a career as a forex trader. No, it’s not that the rules have changed, but luckily we’re having hundreds of great resources these days that make trading effortless and fun for the newcomers.
The trend of automated trading isn’t new. Beginners, as well as professional traders, have been using it for quite some time now. Thanks to continued progress in technology and automation, traders can now generate a stream of passive income for themselves and that too without much struggle.
The purpose of this post is to find out the answer to one of the most sought-after questions, is automated trading the future of the forex market? But before that, first, have a look at what basically is automated trading in the forex world.
What is Automated Trading?
Automated trading also known as algorithmic trading enables traders to fix specific instructions for trade entry/exit that can be carried out by the computer through software. These rules can be based on different indicators including moving average or can also depend on refined strategies that need a thorough understanding of programming language that is in line with the trader’s in-use platform.
It is generally seen that people who randomly start trading do not acquire sufficient proficiency and know-how about the overall trading process. This is perhaps one of the reasons why forex robots or algorithmic trading is so popular. With automated trading solutions, all you need to have is a computer system and a working internet connection to get started. The tools offered by automated trading enable traders, particularly novice traders, to decide their trading limits, which can help to keep their trades at the top. If compared with the manual procedures which involve greater risk, automated trading is relatively more stable, risk-free and consistent.
One great example of automated trading is forex EAs that are designed by highly skilled and professional individuals who draft coding and algorithms after carefully examining market trends. These experts are selected on the basis of their knowledge and achievements, and the perks of using a forex robot is that it excludes the elements of panic and anxiety from the trader’s life.
How to Setup a Forex Expert Advisor in MT4/MT5?
Follow these simple steps to set up a forex expert advisor in MT4/MT5.
- First and most importantly, you should locate the installation files on your MT4 platform. Generally, these files are located under your C drive. The issue is as these files are usually stored in a concealed file folder, it’s somewhat difficult to get access to them directly. To easily locate installation files on your system, click ‘Open Data Folder’ situated in the File section of your MT4 platform.
- The next step would be to select files. Noticeably, there are two types of files available including EX4 file (non-editable file) and MQL4 file (editable file).
- You now have to go inside the MQL4 folder and copy and paste your expert advisor file into the appropriate folder.
- Restart your MT4 platform once the installation ends.
Why Is Automated Trading Better?
There are a number of reasons why automated trading is said to be a preferred solution.
Human capacities are confined. They need to sleep, eat, socialize and perform other activities too besides handling their trades. This is where forex EA comes to your rescue. As these EAs are not required to sleep or socialize, they’re dedicated tools whose sole objective is to keenly observe the forex market and pick the right opportunities for you.
Back-test at No Additional Cost
Back-testing is an integral element of forex trading. With automated systems, you can easily back-test your strategies.
Helps in Decision Making
The biggest hurdle a forex trader faces is deciding when to place a trade. For those who’ve struggled a lot earlier or never had the courage to do trading individually, automated trading is definitely a savior.
Many forex traders cherish running automated systems while concurrently placing trades on their own. For instance, if you’re not comfortable dealing with any specific currency pair, your automated system will place trades on your behalf. This extends opportunities, giving traders a chance to get the most out of the forex world.
Whether you’re a full-time trader or consider trading as a part-time business, you can ensure a continuous stream of passive income for yourself in which you don’t need to do anything from your side.
The above-discussed points prove that sooner or later everyone will ditch their manual procedures and turn to automated solutions. Obviously, it takes a great deal of research before selecting the right type of automated system for your trading style, but the time you’ll save in the long-term is priceless.
Also remember about importance of regulation, it’s advised to trade with a locally regulated broker, so if for example, you live in Canada, you should pick a Canadian forex broker.
- Five Effective Trading Strategies for the Rookies
- 6 Key Features to Look for in a Forex Trading Platform
- Develop Your Confidence as a Trader
- How to Use High Leverage in Forex Trading to Your Advantage
- How to Effectively Use the Leading Indicators in Forex Trading