Basics of Free Forex Trading Software
At this point, some people might wonder why any trader would be willing to give up his or her decision-making power and defer it to artificial intelligence. Well, this can have a number of advantages, such as:
- Automated trading can significantly reduce the level of stress during trading for some traders
- There are some paid options, but traders can make use of automated trading for free as well
- This promotes the disciplined style of trading since the computer will only operate on specific rules
- This tool allows traders to trade consistently with the same strategies
- Traders can choose from dozens of different experts advisors, each using different methodology and indicators
- Forex traders can backtest the performance of any expert advisor, with dozens of currency pairs and different timeframes
- Forex automated trading software can give traders more free time to devote to other important activities in their lives
- The market participants can switch off an automated trading tool any time and step in to make decisions themselves
So as we can see here, many traders might consider utilizing the auto trade Forex software, because of its number of advantages. Now let us go through each of those benefits in more detail.
Advantages of Using Fully Automated Forex Trading Software
Actually, the first possible benefit of utilizing this tool is psychological
rather than financial. Here it is worth noting that there are many people who have a desire to earn some income from Forex trading, but the anxiety about the possible losses pushes them away from taking the ultimate step and opening the trading account. There are also traders, who only stick to demo accounts or only invest very small amounts of money due to the same reason.
However, automated trading software can remove some of this anxiety for many individuals. After all, when traders know that their trading performance depends not only on their skills but also on one of the best free automated Forex trading software, it can be very reassuring. Consequently, the use of such tools can make Forex trading a much less stressful and more enjoyable experience for some people. Therefore, this can help them to maintain their motivation for an extended period of time.
Another major benefit of utilizing Forex automated trading programs is that it can help traders who struggle with maintaining discipline. The fact of the matter is that some market participants do begin their trading day with sound money management rules, but after executing a number of trades, they might become emotional and frequently violate those principles.
Consequently, automated trading software allows the market participants to maintain a disciplined and consistent approach to Forex trading. By avoiding making decisions based on emotions, traders can certainly improve their long term performance and potentially even earn higher payouts in the process.
Here it is worth noting that there is a great variety of choice when it comes to expert advisors
. There are dozens of options available, with each based on different market indicators. Consequently, traders can search through those lists and choose that expert advisor, with whom they feel most comfortable. In fact, they can backtest each of those EAs, in order to measure their performance.
In fact, traders do not have to pay any money for this, automated forex trading software free download is available on the websites of several brokerage companies.
Another important advantage of using the automated trading program is that it can certainly free up more time for traders. Many market participants do have other full-time jobs outside trading, consequently, for them using such tools can be very helpful.
Finally, the use of automated trading software does not take away the trader’s ability to step in from time to time and make his or her own decisions. If at some point the market participant feels that something is wrong, or disagrees with EA, a trader can switch off automated trading and take full control over the trading activities.
How Traders Can Activate Automated Trading on MetaTrader 4?
At this point, many traders might wonder how one can activate automated trading on trading platforms. Well, let us take the case of MetaTrader 4. Some experienced traders believe that it is one of the best automated Forex trading software for beginners.
This might sound rather a complicated task, however, it essentially involves just several simple steps. After opening their MT4 platforms, traders need to go to the ‘navigator’ section. It is typically displayed on the left side of the screen. However, if it is not activated, traders can activate it by going to the ‘view’ and then clicking on ‘navigator’. Essentially, the navigator should look like this:
As we can see from the above image, this includes several items. Firstly, traders can choose between different accounts. For example, here traders can switch from demo account to real trading account.
The second item on the list is called ‘indicators’, this includes dozens of different technical indicators for the currency pairs. Traders can activate those by clicking on them, after which it will be displayed on the chart.
The third item is called ‘expert advisors’. As we can see here it is further split into several sections. Firstly it includes those EAs, which were already provided by the platform, without any installation by the trader. In this case, we have 2 expert advisors: MACD sample and Moving Average.
Now in addition to that, there is the ‘downloads’ section, this includes those expert advisors, which the trader has downloaded from the list of EA’s. In this case, the market participant has downloaded only one expert advisor, called ‘Currency Strength’.
Finally, there is a ‘scripts’ section below. This allows market participants to edit the scripts for each EA or write an entirely new one for the expert advisor.
So in order to activate the automated trading, the trader should click on one of those expert advisors and drag it on that currency pair chart, where they want to make trades. Once the traders do this, the following menu will appear:
As we can see here, traders can choose between only allowing for opening short, long, or both of those positions to the expert advisor. They can also enable alerts so that the market participant will receive an alert when the computer detects a trading signal.
In order to activate the automated trading, traders should check the ‘Allow live trading’ box, as well as the 3 boxes on the right side of the image, under the ‘safety’ section. To complete the process, the trader should click ‘tools’ and then choose ‘options’. As a result, the following menu will appear:
So here traders need to check the box ‘allow automated trading’ and then uncheck the following 3 ‘disable automated trading’ boxes. After clicking ‘OK’ and closing this menu, the last step is to click the AutoTrading bottom on the top of the platform, as shown in the above image.
Once the trader completes all those steps, the small smiling face will appear on the top right side corner of the currency pair chart. This signifies that automated trading is already activated. This means that once the expert advisor detects potential trading signals and entry points, it will start opening and closing positions.
One thing to keep in mind here is that it is the trader who chooses the timeframe of the chart, the expert advisor will work with. So for example, if the market participant opens a 15-minute chart, then the EA will base its analysis on that, instead of 1-hour or daily charts.
Also, it is worth noting that the expert advisor will only execute trades with the particular currency pair which is displayed at the chart. Consequently, if a market participant wants the EA to trade other pairs, then he or she has to activate the automated trading for those charts as well.
If at any stage, the trader is unhappy with the results or wants to take full control over those activities, all one has to do is click once more on ‘AutoTrading’ bottom and the expert advisor will immediately stop executing any trades.
Disadvantages of Forex Trade Automation
Now despite the clear advantages, this tool has for traders, it is worth noting that there are some imperfections that affect even the best automated Forex trading software 2020 traders can use.
The first potential problem with completely relying on automated trading is the fact that each of those expert advisors is based on one or just several technical indicators. Consequently, they simply can not take all variables which affect markets into the account.
For example, the expert advisor, based on moving average crossovers and trends, might work well for some time, but it does not take into account such factors as the latest central bank interest rate decisions, GDP growth rate, or CPI announcements. So consequently, sometimes the automated trading is vulnerable to the volatile reaction of the market to the latest economic publications.
It is also well known that even the best automated trading software 2020 traders can use simply can not deliver a 100% accuracy rate. Sometimes the computers do enter into losing traders and are forced to close their positions at a loss.
Obviously, some expert advisors are more accurate than others. However, always expecting winning trades from them is very unrealistic and can lead to disappointment. However, traders can still earn some decent payouts with automated trading, depending on the quality of the expert advisor as well as the market circumstances.