Forex traders can work independently – conducting their own market analysis and implementing their trading strategies manually. This means that they trade according to their own methodology, using their own ability to identify opportunistic moments and open trades. They can also make use of Forex Expert Advisors, which are trading robots that analyse the market and make trading decisions on the their behalf, using set algorithms.
The benefits of using Expert Advisors, or EA's as they are known, are debatable as professional traders rarely use such robots.
The market is fragmented between a multitude of get-rich-quick EA software companies and professional, skilled traders who know there is no such thing. Caught in the middle are the population of aspiring traders wanting to enter the market, who are unsure about how to select an EA and what skills they require in order to be successful traders. They're uncertain about how EA's work and the financial risks involved. Often times, they're leered in by the software company that has the biggest marketing budget – when what really matters is the expertise of the software author.
Automated trading robots work according to two basic steps:
- They analyse the market using built-in technical indicators and provide signals to open positions based on this analysis.
- They then open orders according to a set algorithm, when signals are received from at least two indicators. Orders are closed when “stop-loss” and “take-profit” signals are triggered or a trend reversal signal is received.
- Does it use scalping or trade breakouts?
- Does it recognise opportunities based on moving averages or volume?
The information provided herein is for general informational and educational purposes only. It is not intended and should not be construed to constitute advice. If such information is acted upon by you then this should be solely at your discretion and Valutrades will not be held accountable in any way.