Automated trading is a method of participating in financial markets by using an automation programme that executes pre-set rules for entering and exiting the markets. As the trader, you’ll combine thorough technical analysis with setting parameters for your positions, such as orders to open, trailing stops and pledged stops. Auto trading enables you to carry out many trades in a small amount of time, with the added benefit of taking the emotion out of your trading decisions. That’s because all the rules of the trade are already built into the parameters you set. With some algorithms, you can even use your pre-determined strategies to follow trends and trade accordingly.
What are the Benefits of Using Automated Trading?
Suitable for both beginners and professionals
Auto trading software such as MetaTrader 4, APIs is, utilised by beginners and professionals alike, both of which may find these systems helpful with decision making. Software is available sophistication.
Improved Order Entry Speed
Since computers respond immediately to changing market conditions, automated systems can generate orders as soon as trade criteria are met. Getting in or out of a trade a few minutes earlier can make a big difference in the trade\'s outcome, although a good internet connection is important for this.
In this style of trading, traders can build a portfolio of different systems and instruments to cover different market conditions allowing for a level of diversification in their approach. This would be impossible for single trading to manage and is why large firms utilize trading systems because they can do so much at one time.
Automated Trading enables you to backtest, this is a way to come up with a strategy and iron out any problems before you put real funds on the line. This would give you invaluable insight into whether or not your strategy is going to be successful. Allowing you to optimize your strategy by looking at market data. It also allows you to determine the system’s expectancy (the amount you can expect to win or lose).'
Elimination of Emotions
Automated trading systems minimize emotions throughout the trading process. By keeping emotions in check, traders typically have an easier time sticking to their trading strategies.
Works on your Behalf
Automated trading is programmed to conduct trades on your behalf according to predetermined conditions by EA’s (Expert advisors) and automatically updated in real-time. No need to be day trading again, no need to stay up at night, scan for hours on the market and this all because the EA carries the heavy load for you.
Automated Trading vs Manual Trading
Completely removes emotion from trading decisions. Most new traders simply struggle to keep on trading a strategy when they have had a few losing trades thereby never achieving a consistent set of trades to allow a statistical edge to work in their favour. Auto trading removes this emotion as the trading robot can execute your trades without any emotion. In this style of trading, traders can build a portfolio of different systems to cover different market conditions allowing for a level of diversification in their approach. As the algo can also show all the previous historical trades, traders can quickly identify whether a system has worked historically and gain useful statistics to understand when it will stop working in the future (such as exceeding historical consecutive losses, etc).
Manual Trading does take time. The trader needs to perform research, be there to place their orders and spend time reviewing their trades and individual behaviour to try and reach superior performance. Some of these tasks can be semi-automated though. Many traders often let their emotions get to them and start to 'gamble.' It is up to the trader to maintain discipline in risk management at all times, making sure they don't risk too much to allow for losing trades, making sure they trade consistently to allow a statistical edge to work in their favour and making sure they focus on their processes rather than all the noise of other people's opinions. Many manual traders struggle with being solely accountable for their trading account and will often blame their strategy, or their platform, or their broker, rather than look internally at their behaviour and decision-making abilities.
How to Get Started With Automated Trading in 4 Simple Steps
Open a trading account or sign in to ZuluTrade
First, sign in to ZuluTrade if you have an account otherwise create a real or demo account and select a brokerage from a wide range of Forex Brokers.
Open the Top Trader’s tab
Simply go to the Trader’s tab on our website and browse the best Trader that would suit your risk appetite and investment levels, check what they’re trading, their performance and track record
Select the Trader'
When you’ve found the right Trader, select the follow button, choose the funds you wish to invest and your preferred risk.
Start your Automated Trading Journey
Hit the follow button again, and you are now Copy Trading. You now will begin to copy the positions of the Trader you have just followed.
Features of our Supported Automated Trading Software
A prized feature on ZuluTrade is The Automator. You can set rules to lock profit, update Stop/Limit for selected trades, close profitable trades or notify you of any significant changes on the markets. The Automator allows you to build rules at the Settings tab of your Forex account.
Compared to humans, trading robots can perform a wider range of calculations and access a wider range of data. analysis trading algorithms and increasing the scope of market analysis all through the use of a set of rules.
The automated trading software on ZuluTrade allows for trading 24/5, even when you are sleeping or unable to monitor market conditions. Trading robots can perform a wider range of calculations and access a wider range of data, increasing the scope of market analysis.
Backtesting Feature on Historical Data
Backtesting simulation involves testing a trading strategy on past performance. It assesses the strategy’s practicality and profitability on past data, guaranteeing it for success or failure or any needed changes.
Integration With Trading Interface
Algorithmic trading software places trades automatically based on the occurrence of the desired criteria. The software should have the necessary connectivity to the broker(s) network for placing the trade or direct connectivity to the exchange to send the trade orders.
If you’ve spent years perfecting a strategy, then automating it could make it even more efficient. Which could in turn you provide you with greater and more consistent profits. No need for programmers or any programming language.
Frequently Asked Questions (FAQs)
ZuluTrade is an independent legal entity acting as a Service Provider for FXCM and is not affiliated with FXCM. FXCM does not endorse any product or service of the Service Provider and is not liable for any errors, omissions, delays, or actions as a result of your use of this Service Provider. Nothing associated with this Service Provider’s offering shall be considered a solicitation to buy or an offer to sell any product or service to any person in any jurisdiction where such offer, solicitation, purchase or sale would be unlawful under the laws or regulations of such jurisdiction.
Trading spot currencies involves substantial risk and there is always the potential for loss. Your trading results may vary. Because the risk factor is high in the foreign exchange market trading, only genuine "risk" funds should be used in such trading. If you do not have the extra capital that you can afford to lose, you should not trade in the foreign exchange market. Forex Brokers and ZuluTrade are compensated for their services through the spread between the bid/ask prices or there may be a cost to initiate a trade through the bid/ask spread. Profit sharing accounts are subject to a monthly performance fee per selected trading system.
Forex trading involve a real risk of loss. No "safe" trading system has ever been devised, and no one can guarantee profits or freedom from loss. Past performance is not indicative of future results.
Forex Brokers and ZuluTrade are compensated for their services through the spread between the bid/ask prices or there may be a cost to initiate a trade through the bid/ask spread.
Profit sharing accounts are subject to a monthly subscription fee and a monthly performance fee per selected trading system.
Hypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program.
One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk in actual trading. For example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results. Please check our full disclaimer.
The information provided on this page does not constitute investment advice. FXCM is not liable for errors, omissions or delays, or for actions relying on this information.