Win a luxury hotel stay at the five-star Rixos Premium Magawish Suites and Villas in Egypt

Is it possible to trade Forex automatically?

The foreign exchange market (dubbed Forex or FX) is the market for exchanging foreign currencies.

By LLM Reporters  |  November 19, 2021
forex trading

People around the world have been engaged in Forex (also known as the Foreign Exchange Market) trading for several centuries, capitalising on the foreign currency exchange to leverage profits and make money – but the methods of trading have continued to evolve over the years, making the practice more straightforward today than it has been before.

While the traditional manual Forex trading method that has long been used serves its purpose, its pitfalls are that it is time consuming and requires a great deal of knowledge – something that has previously ruled out amateurs and would-be traders entirely.

But thanks to the latest technological advancements in recent years, there is now a much easier way to trade Forex, and even those who are completely new to the process can get started relatively easily. Thanks to robots, automatic trading is disrupting the way the market works, using algorithmic and human instructed systems to execute trades. 

It isn’t difficult to find a list of the best Forex robots through a quick internet search – but how exactly do they work? This new technology was created to assist in automatic Forex trading – which, in the simplest words, means hands-off Forex trading. Through a combination of signals, they can predict the market outcome and determine whether it’s the right time to buy or sell – taking the guesswork out of things and providing greater clarity on when and how to act to see success.

forex trading
First and foremost, it’s essential to get a handle on the basic concepts involved with trading Forex

What is automatic Forex trading?

Suffice it to say that the days when Forex traders relied on manual systems to study and understand complex Forex trends, in order to determine the right time to enter or exit the market, are long gone. Although a functional process in theory, in reality, it meant that too much time was wasted studying the market trends before a decision was made – at which point, opportunities were often already lost.

But using complex, computer-generated algorithms which analyse data collected through software to determine currency trends and price patterns, Forex robots enable users to trade automatically, even while they are sleeping. In doing so, they can even execute trades based on the analyses. Behind the program, human input is still required to monitor and tweak the algorithms to ensure they are performing in their favour – but ultimately, it’s the simple and time-saving solution many traders have been working for.

Forex trading robots

The terms ‘automatic trading’ and ‘Forex trading robots’ pertain to the same concept. The robots in question aren’t physical machines that stand by a computer and press commands to determine trades – rather, they are programmes or pieces of software that are installed on computers to facilitate hands-off trading. 

The foreign exchange market (dubbed Forex or FX) is the market for exchanging foreign currencies.
When it comes to making a profit through Forex trading, timing is everything, which means being patient is essential

Because a robot is a program, its accuracy level is many times higher than that of a human’s. However, it is important to note that robots are not 100 per cent fool proof and have some limitations of their own. 

Is automatic Forex trading really better than manual?

Primarily, the purpose of automatic trading is to eliminate human intervention, because human beings are slower and are more likely to make mistakes. It all sounds pretty great – but is it all it’s cracked up to be?

In the Forex market, it’s easy for emotions to run high, especially when traders find themselves under pressure to make a profit. The moment at which a trade could go one way or the other is a delicate one, and acting hastily based on the emotions they are feeling at the time has the potential to spell disaster.

Automatic trading programmes, on the other hand, do not have emotions and will act only within the rules, guided by the signals they have generated based on market analysis. This means that in automatic trading, the chances of losing a trade are significantly reduced – so it’s perhaps little wonder that many traders – from amateurs to seasoned pros – are turning towards this impressive new technology to help them see success.

Remaining disciplined in Forex trading is important, especially when trading manually – but due to life pressures and unexpected occurrences and events, it isn’t always possible to remain at the top of your game. Failing to keep your eye on the ball or missing an important moment of market fluctuation could result in a huge financial loss, but with automatic trading, the rules cannot be bent and your trades are never left unattended, with artificial intelligence again following a specific set of pre-programmed instructions designed not only to keep your money safe, but to help you grow it.

forex trading platform
Many newcomers to the Forex market do not yet know the tricks of the trades, and most make some considerable losses in the beginning

Many newcomers to the Forex market do not yet know the tricks of the trade, and most make some considerable losses in the beginning. As a result, many amateurs are quick to give up, but thanks to machine intelligence, lack of experience is no longer an issue. The chances of winning in automatic trading are much higher and can help get newbies off to a flying start, thus beginning the start of a potentially prosperous new phase in their lives. 

Minimising risk is another huge benefit of automatic trading, with traders able to diversify trading through multiple accounts. By pairing various currencies and spreading trades across several instruments, artificial intelligence can keep your money safer, with the trading system scanning multiple opportunities across several markets to generate accurate trades. 

The bottom line

Traditionally, Forex traders have relied on manual methods to study the market, determine the possible outcomes and execute trades. But this method has come with many limitations, with the majority of traders making more losses than wins as a result. However, technology is developing quickly and today, automated trading systems are changing the Forex trading floor fast, making trading accessible to a greater net of people and allowing anyone to dip their toe in the water with minimised risk.

Disclaimer: Investing money carries risk, do so at your own risk and we advise people to never invest more money than they can afford to lose and to seek professional advice before doing so.