The use of automated trading systems and automated trading platforms has grown significantly in recent years. According to a report by MarketsandMarkets, the global algorithmic trading market is expected to grow from $11.1 billion in 2020 to $18.8 billion by 2025, representing a compound annual growth rate of 11.2%.
Automated Forex trading uses software programs or “Expert Advisors” to place trades on behalf of traders, based on predefined criteria or strategies.
But the question remains, does automated Forex trading actually work?
The short answer is yes, automated Forex trading can work.
However, if you are looking for the best-automated trading platform, something like MT4, please remember that the success of automated Forex trading depends on several factors, such as the quality of the software used, the strategy employed, and the market conditions.
What exactly is Automated Forex Trading?
Because of technological developments, global financial systems are becoming ultra-sophisticated, and as a result, many retail traders are feeling outmatched in this ultra-competitive global financial system.
Anyone who engages in active Forex trading and uses manual methods to do so knows how time-consuming and repetitive it can be to analyze charts, read economic reports, track price movement, and locate purchasing and selling opportunities. For most traders, emotional decision-making replaces the best trading strategy after placing a trade, and the result is a loss over the long run.
Retail traders who handle losing portfolios range from 70% to 85%. This is exactly the space Automated trading platforms make a grand entry while offering traders a hands-free trading strategy that generates reliable earnings completely free of charge.
Quality of the Software Used
One of the most important factors in the success of automated trading platforms is the quality of the software used. There are many automated trading software programs available, and not all of them are created equal. Some are highly sophisticated and capable of executing complex trading strategies, while others are more basic and may only be suitable for simple trading strategies.
Traders should be careful when selecting an automated trading platform and do their research before committing to a specific one. They should look for a platform that has a proven track record of success and is regularly updated to adapt to changing market conditions.
Strategy Employed
Another critical factor in the success of automated trading is the strategy employed.
When it comes to financial markets, everyone acknowledges that this sector is constantly evolving, with the use of cutting-edge technology and tools at their heart. We see several financial companies that appear more like tech company than a company that provides financial services.
Many benefits of Automated Trading Platforms
Automated trading platforms have been gaining popularity over the years as a way for traders to trade the markets without the need for constant monitoring.
One of the main advantages of automated trading platforms is that it allows traders to remove the emotional element from their trading decisions. Emotions such as fear, greed, and hope can often lead to poor trading decisions, resulting in significant losses.
Automated trading systems are designed to follow a set of rules and execute trades based on specific market conditions, without the influence of emotions.
Another advantage of automated Forex trading is its ability to analyze large amounts of data and make quick decisions.
Automated trading systems use complex algorithms to analyze market data, identify trading opportunities, and execute trades in a matter of seconds. This allows traders to take advantage of even the smallest price movements, which can be difficult to do manually.
Automated trading systems can also operate 24/7, unlike human traders who need rest and sleep. This means that automated trading systems can take advantage of trading opportunities that may occur during off-hours, which human traders may miss. Trading with one of the top Automated Forex Trading Brokers increases long-term profitability.
Too many options? Which is the best for Forex Trading?
Given the variety of options accessible, traders must choose the automated Forex trading software that best meets their needs. There are signal providers, copy traders, and completely and partially autonomous ones.
MT4 continues to be the most widely used because of its adaptable architecture. Expert advisors (EA) can be developed using the MQL4 coding language, and many brokers provide APIs that provide more sophisticated connections to MT4 for order administration and placement.
Back-testing features in MT4 enable traders to compile enough data during the brief free sample period. The best choice is still to code your strategy, but many people are unable to do so. Nearly 20,000 EAs are available on the MT4 market, so retail dealers should have no trouble finding what they require.