Using the forex trading platforms is an excellent solution to be applied in the world of Forex to entrust specific software with decisive roles in the execution of one’s operations. Automatic trading software, often also called trading software or EAs (Expert Advisors), are widely used nowadays.
So, let’s see what this automatic trading software are and how they can be used in forex trading to improve your trading operations.
How does automatic software work?
A forex trading software is nothing more than software that implements a certain trading strategy. The purpose of this software, once installed on your computer and connected to your broker’s trading platform, is to “automate” the trading process. Automated trading software can be of two types:
- They can simply scan the financial charts,analyze the trend in the value of one or more assets (selected by you), and provide you with trading signals (i.e. indicate when it is time to invest and in which direction to invest).
- They can both analyze the charts and place orders on your behalf,e. in this case the software will identify the trading signals and act accordingly, investing for you (obviously you will decide the amount of money to invest automatically for the operations, as well as to set a limit for gains and losses)
These are therefore two completely different types of software, which can also completely automate the forex trading process. But according to what criteria is it possible to choose a software for automatic trading? Also is it convenient to use them or not?
Trading software compatible with trading platforms
Before answering the previous questions, it is good to dwell on the following topic for a moment: the forex broker you will use to trade. In fact, not all forex brokers allow the use of software on their trading platform. We are talking about software that completely automate the process (therefore they find the signals and invest).
It is possible that there are brokers who do not allow their use, or it is possible that the forex trading platform offered by the broker is not compatible with the best automated forex trading software you want to install. Therefore, if you want to use one of these programs, it is good that:
- Make sure that the forex trading platform is compatible with the software you want to use
- Make sure that the forex broker you are registered with allows the use of such software
As for software that only provides signals to you, there are usually no problems. This software can be installed safely, and often it is also possible to do so on charting services external to the broker’s trading platform. So the purpose of these programs is only to analyze the charts and provide you with the trading signals: it will then be up to you in this case to go and invest.
How to get a forex trading software
Now that we understand what auto trading software is, let’s see how you can get one of this software. as a rule, this software can:
- To be sold by a site external to the broker, therefore a company that deals with creating and programming software for automatic trading
- Being offered by the broker itself to its customers, very often free of charge
- Be obtainable on the broker’s trading platform, but these are software created by other usersregistered on the platform
In the last two cases, they are almost always free software. In the last case, to be precise, we are also talking about Social Trading, or the possibility of automatically following and copying the operations of other traders registered on our same platform. In the second case, however, the broker offers the software to its customers as an incentive to register.
In most cases, however, these software are sold by sites external to the broker itself. And almost always, you have to pay to download and then install these software. There are software that require a single payment (therefore only for the purchase) and software that instead require a monthly or annual payment (as a sort of subscription).
Our advice, if possible, is always to test these software: fortunately many of these software can be tried for a short period of time in a free trial (sometimes, however, you simply need to register at the seller’s site; other times you will have to sign up with an accurate forex broker, in order to receive a free copy of the software to download). And in addition to testing it is important to read the online reviews on the software you want to download and use.
Advantages and disadvantages of using automated trading software
We conclude our article by going to see what the main advantages and disadvantages are of using a software for automatic trading in forex.
- Simplification of the trading process:many of these software are highly appreciated by those who are inexperienced in the world of forex trading, because they allow you to invest even without having much experience or knowledge of online trading. The most useful thing, theoretically speaking, would be to use software that provides signals, and then decide whether to invest by following the advice or not: in this way we can improve our ability to evaluate and make investment decisions.
- Significant time savings:automatic trading software are also useful for those who cannot spend too much time in front of the computer to check financial charts and invest.
- Ability to use trading strategies created by experts:much software are based on trading strategies created by other traders with much more experience. In this way it is possible to exploit their knowledge (and their strategies).
- Risk of falling into a scam:unfortunately, it is good to say, there are also software and software that are real scams. Stay away from anyone who promises you automated trading software and software that will get you smashing rich in a matter of weeks without even lifting a finger!
- Trading software are not foolproof:all the software you will find for sale are not perfect, as they are based on a trading strategy. And as you well know, there is no perfect trading strategy that can guarantee 100% success. Software can also cause losses: the important thing is that positive operations are greater than negative ones.
- The importance of studying:always remember, especially if you are just starting out in forex trading, that software cannot replace you. That is, do not think of only using software to trade, so that you never have to learn for yourself how online trading works and how to use technical analysis and various trading strategies.