The concept of automated Forex trading system is mind-catching.

Before the automation trading system in Forex, exchange-traded futures market was the first to switch on automation. Then, the traders on the Interbank spot FX market decided to follow the latest trend and also moved to the new system.

Automated Forex trading system allows traders to execute their trade on spot Forex market automatically and anytime of the day, based on existing technical indicators and custom trading rules. There are several characteristics included in the automated trading system, such as:

• Automatic trailing stops especially when the trader is losing in a specific trade position;
• Account equity management;
• Stop and/or limit orders;
• Discretionary market orders; and
• Several technical analysis indicators within your discretion for enabling trend-following systems.

Automated Forex trading systems supports most of the indicators (the technical support will depend on the technology, and also on the available features of the automated system):

• WMA (weighted moving average);
• EMA (exponential moving average);
• SMA (simple moving average);
• VMA (variable moving average);
• TMA (triangular moving average);
• TSMA (time series moving average);
• WATR (wilder’s average true range);
• VHF (vertical horizontal filter);
• Standard deviation;
• Trailing stops;
• Mass index;
• Fixed limits and stops, and others.

The success of the automation process to The Forex market is credited to several factors, as follows:

• Its ability to perform or execute trades in real time. Due to the automation, a trader can close trades within a few milliseconds. It is impossible to do this in manual systems, as previous trades are normally closed after several hours. Additionally, there are also instances wherein a trader incurs several losses in a row that prevents him from making any fresh transactions. Thus, with automated Forex trading system, this problem could be avoided.

• Its ability to greater diversification. Due to the existence automated trading system now in place, a trader can trade in various local as well as international markets within varying time zones. This means that you can place trade or close deals with different traders from various markets around the world no matter what time.

• Its ability to analyze short-term data. This cannot be done in manual trading system. Thus, traders using automated system have the bigger advantage since they can predict market trends in less than an hour.

The consequence to consolidate the features as well as the benefits of automated Forex trading system, will help you conclude the following: with the Forex market on automation, you will be able to place more trades on a single day, though increasing the average volume trades daily.

For further clarification on the conclusion. Let us take the following scenario: If you are trading using the manual system, you will notice that it takes time before a trader confirms if he will accept your deal or not. He will look on the market condition first as well as the exchange rate of the currencies that you are trading with. However, if it takes time before a transaction will be finalized; there would be fewer trade volumes.

If you are using the automated Forex trading system, the evaluation of exchange rates and market conditions could be done just in a few minutes, given that Forex data are now updated in real time. After less than an hour, you may be able to take your position whether you will push through the deal or not. If a Forex transaction per trader is averaging within an hour, a single trader can place as much as 8 trades within the regular trading hours (if he is following the day trading schedule) and additional trades beyond the regular trading hours. There are thousands of traders in just a single market that can place such average number of trade per day in the market. Combining it with the number of Forex markets around the world, the figure is huge enough.

The technology is changing continuously, though there is a tendency that the average number of trades per day will grow, thus a possibility of increased trade volumes on daily basis. With faster trade execution, that is a certain possibility.

Be thankful, the Forex market is now at the helm of automation. Now, faster transactions make earning money through the market trading easier.

If you would like to have more information please click here: Automated Forex Trading

Just how important is an automated system to the Forex trading system?

Before we answer that question, let us first find out how big the trading market is. From there, you can get to know the importance of automated systems for the Forex market.

It is real that Forex is the most extensive market around the world not just in terms of average daily turnover and average revenue per trader. It is the largest market in terms of participants.

You name it, we’ve got it. See the following:

BANKS- they are not just for saving money and lending capital to enterprisers, but they are also one of the greater players in Forex market. Banks cater both to large quantity of speculative trading and daily commercial turnover. Well-established banks can trade billions of dollars worth of foreign currencies. Some of the trades are accepted on behalf of their clients, but most are through proprietary desks.

COMMERCIAL COMPANIES- these commercial companies trade small amounts of foreign currencies compared to larger banks and their trades produce small and short-term effect on the market rates. However, the trade flows from transactions made by commercial companies are vital factors with regards to the long-term direction of the exchange rate of a certain currency.

CENTRAL BANKS- central banks play an important role in the Forex market. They have the control over the supply of different currency, inflation, and interest rate. Additionally, they have also official target rates for the currencies that they are handling. They are responsible for stabilizing the Forex market by using foreign exchange reserves. Their intervention is enough to stabilize a certain currency.

INVESTMENT MANAGEMENT FIRMS- these firms commonly manage huge accounts on behalf of their clients such as endowments and pension funds. They are using the market to promote transactions, specifically in foreign securities. An investment manager bearing an international equity portfolio needs to purchase and sell several pairs of foreign currencies to pay for foreign securities purchases.

RETAIL FX BROKERS- they manage a fraction of the total volume of Forex market. A Forex broker estimates retail volume of between 25 to 50 billion dollars each day, which is presumably at 2% of the total market volume.

SPECULATORS- these are individuals who purchase and sell foreign currencies and profit through variations on its price as opposed to popular methods such as interest and dividends. They play the important role of transferring the risk to individuals who do not wish to bear it.

Only in Forex market, there are already six major players partaking on the $1.8 trillion worth of daily turnover. With a large number of traders in the market, it is becoming a real need to switch from manual to automated Forex trading system.

Among the major Forex players mentioned above, the automated trading system is of great advantage to the speculators. Since they focus on the price fluctuations of several foreign currencies in order to profit, the real time data analysis will help them identify trades that will give advantage to them.

There are several automated Forex trading systems available in the market. There are also automated Forex systems that are offered for free or as part of their trading account acquired from their Forex brokers or agents. That kind of complimentary system packages are typically elementary trading system. If you are looking for more functions, you can avail of it through additional payments.

There are two kinds of automated Forex trading system. These are discussed in the following:

Desktop-based system- all Forex-related data are stored on your desktop’s hard drive. This system is unpopular to traders due to the susceptibility of all data to computer virus, contamination and security problems. Worse, when the computer malfunctions, all vital information might be lost and cannot be retrieved (unless you have some back-up files of your own). However, it is little expensive compared to the other types of automated trading system.

Web-based system- the security of your Forex account and other data are supplied by your web-based provider. These are hosted on secured servers. It is also convenient considering that there will be no software required and it is universally compatible with your Internet browser.

You may also try different automated trading system demos first so that you will be able to opt for the automated system that suits your personal preference and needs.

Even if you are just a small-time trader, it will be an advantage for you to use an automated Forex trading system for your future trades.

If you would like to have more information please click here: The Forex Market