Automated forex trading is a method some financial speculators are using to do forex trading the easy way. Automated forex trading is exactly what it sounds like. A highly sophisticated and complicated computer program that uses mathematical algorithms to determine when to buy and sell currency and it makes the trades for you. You put an initial investment into the account, and then let the system do all the work for you.
It may sound risky to let a computer program choose when to buy and sell currency, but automated trading can often be safer than doing it yourself. Humans are subject to error, to misreading charts, and to overlooking data. Humans can also let their emotions get in the way of making wise decisions, like the gambler who loses everything because he just can't tear himself away from the crap table.
An automated forex trading program has none of those flaws. With the software doing it for you, it's as though you were always watching every market, noticing every trend, instantly analyzing all available data, and making the wisest decisions.
There is a cost for this, of course. Most brokers that offer it require a minimum investment of several thousand dollars or more, and they may charge a fee on top of that.
But the benefits of automated forex trading can be great. Whereas manual trading requires an investor to study the market intensely before jumping in to it, automated trading requires no training at all. By learning the very basics of how the market works you can tell what your automated system is doing for you, and that's it. Sit back and let it make your money work for you.
Automated forex trading is also useful for companies and other institutions that want to diversify their assets but don't have the time or resources to devote to forex trading. If a computer program can do it for you, why have one of your employees handle it, right?
It is a fact that automated trading systems rely on technical analysis rather than fundamental analysis. That is, the algorithms examine past market performance and general trends and base their trading decisions on that, not on external factors such as politics and environmental concerns, which may affect a nation's currency. Nonetheless, automated forex trading has proven to be highly effective and accurate for many investors.
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