The concept of automated foreign exchange trading system is mind-catching.
Before the automation of the foreign exchange market, exchange-traded futures market was the first to turn on automation.
Automated foreign exchange trading system enables traders to execute their trade on spot foreign exchange market automatically and anytime of the day, based primarily on existing technical indicators and custom trading rules. There are several features included in the automated trading technique like :
automated trailing stops especially if the trader is losing in a specific trade position ;
Stop and/or limit orders ;
discretionary market orders ; and
Various technical analysis indicators within your subtlety for enabling trend-following systems.
Automated forex trading systems supports the majority 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 ( straightforward moving average ) ;
VMA ( variable moving average ) ;
TMA ( triangular moving average ) ;
WATR ( wilder's average true range ) ;
VHF ( vertical horizontal filter ) ;
Trailing stops ;
Mass index ;
Fixed limits and stops, and others.
The success of the automation process to the foreign exchange market is attributed to several factors, such as the following :
It is not possible in manual systems, as prior trades are routinely closed after several hours.
Its capability to greater diversification. With automated trading system now in effect a trader can trade in various local as well as international markets within varying timezones. To paraphrase, you can place trade or close deals with different traders from varied markets around the globe even at the middle of the night.
Its capability to research short term info. This feature is not available in manual trading method. Thus, traders using mechanical system have the bigger advantage since they can predict market trends in less than an hour.
To further clarify the conclusion. Let us take the following scenario : if you're trading using the manual system, you'll 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.
If a foreign exchange transaction per trader is averaging within an hour, a single trader can place as much as 8 trades in the regular trading hours ( if he is following the day trading schedule ) and additional trades outside the regular trading hours. Combining it with the amount of forex markets around the globe, the figure is just massive enough.
With faster trade execution, that is a certain possibility.
Transactions are now faster, and making money through forex trading is now less complicated.
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