Automated trading: trading without a trader
Having come full circle hell learning to trade in the foreign exchange market, you can proudly call yourself a trader. However, nothing and nobody can guarantee that using the latest trading strategies and best technical indicators will make your trading profitable, because a correctly made forecast on a currency pair is the basis of getting income.
To be honest, this is not an easy task and not everyone can do it. Therefore, many traders decide to put it on the shoulders of a robot, giving preference to automated trading.
What methods of automatic trading exist
Of course, we lied a little bit. Trading, in any form, requires minimal, but still participation of the trader. We will consider two of the most common methods of automatic trading:
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Transaction copying services
The method of copying trades is quite simple. It consists in the fact that the trader's trading account is connected to another account where a professional trader trades. All trades opened by the professional are automatically duplicated on the connected account.
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Trading robots
This method is familiar to every trader. It is necessary to install a trading advisor to your account, configure it and run it. Such an Expert Advisor, using its algorithm, will independently open and close transactions.
An important digression: you may say: "Wait, dear, what about investing in PAMM-accounts, trust management? After all, these are also ways to minimize your participation in trading.
To some extent you are right, but there is one key difference between the above two ways of automatic trading and other ways of making passive money on.
With trust management or when using a PAMM-account, the managing trader bears a certain responsibility to his investors. Using copying trades or advisors, you fully and completely assume all trading risks. If something goes wrong, you will not be able to file any claims to anyone.
Why automatic trading is good
- Your trading deposit remains under your control. No money has to be transferred to anyone, and the trader, whose trades are copied, and the service have no access to your deposit.
- The service copies only the entry and exit points, and the volume of the open position you can set yourself, controlling the risks.
- You will have free time, which you can use wisely for their development. For example, read a book about effective investments.
- No one limits you in the number of trading advisors or traders used, whose trades will be copied. The main thing is to have enough deposit 🙂
Why automatic trading is not always a good thing
- Almost all trading advisors inadequately react to market changes at the time of important economic news.
- Choosing a quality Expert Advisor is very difficult. Given their incredible abundance, you have to spend a lot of time reading reviews, testing and tuning EAs to get a good result.
- To select a professional trader whose trades will be copied, you will be provided with a trading history. However, as you know, making a profit in the past is no guarantee that it will be made in the future. This is also true for trading advisors.
- For a beginning trader using these methods almost always means the end of his trading career. A person who has never understood the principles and subtleties of market mechanisms stops developing and improving his trading skills.
- All trading risks are fully borne by the trader.
To summarize, automatic trading on the currency market has the right to life, although it does not guarantee that by copying someone's trades or installing a "super-secret trading robot straight from Wall Street" on your account you will make a profit. It's quite possible that it's your path to profit that lies in manual trading. After all, you trade with your own money and you're entitled to manage it yourself, and our trading articles will help you make adequate decisions.
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