Automated Forex Trading Systems

Forex is a shortened name for the foreign exchange market, the global currency trading market. Forex is the largest and most liquid exchange market in the world. There are many large Forex traders, including banks and financial institutions, corporations, institutional investors, and even governments. Beyond the many institutional traders, there are also retail investors, being private individuals who trade Forex for their own accounts indirectly through brokers and banks. Private investors are often termed speculators, although in fact there are many speculators even among large institutional traders, and in a very real sense, speculation is the essential practice behind Forex trading.

Private traders make use of many different strategies and trading systems, which are designed to render more accurate analysis of trends and positions than an uninformed individual might otherwise be able to develop. Many systems are automated, meaning installed on and operated from software platforms on personal computers. These are essentially push button systems that implement and apply trading strategies and methods. They are designed to analyze market conditions and render trading signals which the trader can rely on for the entry of trades. Some systems are used for analysis of market conditions only, but others combine this analysis with actual trade ordering and completion through the trader’s broker.

There are many Forex trading systems on the market. They range in price from under ten dollars from dealers such as eBay, to hundreds and even thousands of dollars when purchased directly from makers and distributors. Systems are widely advertised in Forex magazines, in broker publications, and on the Internet on Forex trading websites and websites operated by system dealers. Websites provide multiple clickable pages of details on Forex systems, including technical software details, demonstrator applications, system results and back test results, and testimonials. This surfeit of overview details actually amounts almost to nothing more than advertising, although a knowledgeable and diligent reader might be able to ferret out some useful insight and details through a thorough reading of pages.

The stated intent behind most automated Forex trading systems is essentially to take the individual trader out of the equation. Supposedly, the systems are so effective at discriminating between instruments in the market and designing trades, that signals are completely reliable and suggested trades consistently successful. All that the trader must do, so it is suggested, is to place suggested trades at the time and in the order that the system instructs. The trader need not complete any analysis of his or her own, and need not attempt to second-guess the system. Following its lead, success is assured.

This is, perhaps, an exaggeration of the claims made by systems makers. Forex traders are not expected to proceed mindlessly through their trading activities. Discretion and judgment are very much called for. At the same time, many Forex trading systems are described by their publishers as “hands free.” To what extent, however, can any Forex trader afford or justify following a hands free process? The conclusion must be that automated Forex trading systems are really only appropriate for traders who already know enough to trade without a system. A system can be a tool or a template, but really nothing more. For assistance with Forex trading or to learn more about automated trading systems contact today!

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