In order to determine the real efficiency and performance a trading system can offer, it is important to trade each set-up that it has to offer, not just those you see at your trading desk website. By using an automated system, you can assess the system and its effectiveness. Trading programs eliminate emotionality and mistakes from Forex trading. For this alone, many discretionary forex traders have moved to automated trading programs.
Automated trading is becoming more popular with private Forex traders. In a recently conducted study (by IBFX), 94 % of traders indicated that they plan to continue using automated trading strategies or even increase them in the coming 12 months. Only 6% indicated that they would decrease the use automated trading strategy. Why is Automated Trading Strategies gaining in popularity? Articles 56% all trading on the New York Stock Exchange is high frequency or computer automated trading. Algorithmic Forex trading was only 4% for 2004. By 2007, the figure had risen from 4% to 28%. It’s estimated that 50% of Forex trades have been automated. This number is expected to keep rising. It’s no secret that automated Forex systems are becoming more popular.
The technology is the primary reason behind this rapid growth of automated trading. Since technology is a driving factor in many other fast moving areas, has it had an impact on Forex Trading Systems? The first step to developing auto trading systems was moving away from the trading floor and towards computerised trading. Once this happened, trading companies developed their trading systems in order to place orders using the new electronic markets. Retail traders now enjoy access to the technology that was once only available to institutional trading desks and large banks. Forex traders are now able to compete on a level playing field with the new trading platforms. When traders started to automate their Forex day-trading systems, they realized the vast opportunities that were presented. Traders started to share their ideas and approaches, and now automation is a way of life for individual traders.
Automated systems will increase your performance since your auto system is capable of following more markets, efficiently, and more often. Manual trading can only be done for a limited number of hours per day. As a result, many manual forex traders have switched over to automated Forex trading software. Automated Trading Systems are so much more cost-effective as they require little human intervention. Some traders only have a couple of hours each day to trade. A trading auto system allows part-time investors to trade full-time, by trading the markets on their behalf. Traders only have to monitor the system’s performance. Day traders will now be able to concentrate more on research and system improvements, as well as keeping up with current market trends, rather than waiting at their trading screen for the next trade. This allows them to focus on more important matters and less mundane tasks, which will improve their overall performance.