By James Randall, freelance writer.
Almost every trader would like to sit back and watch their portfolios increase in value without even lifting a finger. Sounds great doesn’t it? Well, Forex trading software could help you achieve this deployed correctly.
What are Forex Trading Bots
Forex trading robots, otherwise called automated trading systems are computer software that are designed to execute trading actions based on a set of pre-determined trading signals without any human intervention. All that you require is a valid software subscription and internet connectivity.
As the name implies, Trading bots are computer programs developed for the prime purpose of automating the trading process. They are typically used in the stock market, forex trading and more recently on crypto-currency exchanges.
Why You Need a Trading Software
Cuts out Emotions
One of the leading reasons for catastrophic losses in the forex markets is that humans fail to make optimal trades due to factors like emotions and sentiments. This creates a need for software programs that are built to assist in taking potentially profitable trade decisions with minimal human effort or interference required.
With the aid of automated trading software, you can adjust desired risk variables. You can also program your bots to stay within the set limits to help to minimize losses.
A forex bot is a computer software that makes use of key forex trading signals to make trading decisions regarding a certain pair of currency at particular period of time. The forex markets are dynamic and time sensitive. Therefore timely trade decisions have to be made if one is to make profits consistently.
Forex trading software are available 24/7 to investors, thereby providing a way to maximize profits on the markets, without spending so much personal time analyzing candlesticks, charts and other market dynamics.
If you are not going to be available to monitor the charts for long hours of each day, trading software can help you to execute your trades If you are not going to be available to monitor the charts for lengthy hours of the day, trading bots allow you set up a strategy to autonomously execute your trade while you are away. All you need is reliable internet connectivity and power supply.
Most people generally that bots surpass human trading efficiency because of its ability to analyze charts and compute complex calculations with it’s mathematically superior know-how on probability. A great trading software will help you discover exotic Forex pairs to trade, and boost your profits over time.
Even highly-experienced traders lose money when they trade. This emphasizes the need for the average investor to seek help when analyzing market signals for optimal trading decisions. Hence, the role of trading robots in the forex markets is quite significant.
How to Choose the Right Trading Software
Developer Company Background
When you hit the market for a trading software, the first thing you need to check is the background of the vendor or developer of each software. Do not go for vendors who have only just registered a few weeks or months before you encountered them. They could be a part of an elaborate scam that targets new unsuspecting traders.
Asides the tendency of fraud, it is much safer to go for software developers or vendors who have prior experience in the trading world. Such developers would have had enough time to fine tune their software and take out errors overtime.
Likewise those who are completely transparent about the name of founders, team members, HQ location and other relevant financial information.
Past Trading Results
Most trading software developers try to entice new users by making outlandish promises of sky-high profit margins. The best way avoid falling for such ploys is to check its past trading records. There are several authoritative sites such as fxblue and myfxbook that provide a reliable platform for you to crosscheck the performance records of any trading software. You should endeavor to check if the system has experienced abnormal losses in the past. This is usually indicated by an unusually high drawdown rate.
Trading Terms and Charges
Even when you make profitable trades, charges can quickly eat deep in to your profits. So, before you chose a trading software, always select providers who do not charge a lump sum amount at the start. There are many software products that allow traders to start with less than $3,000 initially.
Ensure to ask the customer support as many questions as you need to understand all the terms and conditions. Ensure that the platform is not withholding information about any hidden fees that they may try to sneak in on you the long run. Those charges, may seem small, but they really do add up over time.
It is true that trading bots are increasingly being used to analyze and make trades in the forex markets. They have helpful in increasing profitability. But experts recommend should not see them as a direct replacement to for your own decision making or an expert broker’s consultation. You should only deploy them to smoothen out your trading strategies.