Should you Opt for an Automated Forex Trading System?
More and more traders are choosing an automated Forex Trading System over the discretionary or manual approach. This isn’t really surprising considering how robots promise to produce profits without the additional job. However, are automated options really worth it? For those who are wondering about switching from a Discretionary to a Mechanical Forex Trading System, following are some of the pros and cons of this move.
Low Investment Cost
Automated trading systems cost around $100 or more depending on their reputation. Compared to an analyst, however, this is definitely cheaper. Overtime, the system would start to earn enough to justify its cost while providing traders with even more profit.
Less Work
After installation and setting of parameters, the software would start doing all the work for the trader. This means getting data, assessing, analyzing, comparing and performing the necessary transactions that would result to profit. Traders could literally take a day off during this time as the program handles the full transaction. Even better, automated systems are capable of running 24 hour a day which means that they will be privy to all the relevant information made available during that time.
More Focus on the Important Stuff
Since the automated system would be the one doing most of the work, traders can start concentrating on the more important concerns. For example, they now have the time to study data history and see if there is any way the parameters could be changed to produce even better results.
Customization
Automated systems typically allow traders to modify specific parameters as they see fit. This would provide the opportunity for growth in terms of profit as well as a way to experiment and learn more about the trading process.
Lack of Emotional Attachment
One of the top reasons why a discretionary Forex Trading System fails is the fact that traders are influenced by emotions. With automated systems, this is not the case at all. Instead, the software will open and close depending solely on the specific parameters the trader has set up, effectively decreasing the risks encountered.
Disadvantages of Automated Forex Trading
Of course, some disadvantages regarding this technique is also present. For one thing, automated systems are not nearly as adaptable as actual traders. They are incapable of working within a different market than they are used to. When this happens, the trader would need to develop a different system so that the parapets would fit with the current situation.
Another risk factor is the possibility that a trader would become dependent on the system. Although this might seem like an advantage, the fact is Forex is a skill. This means that as much as possible, traders should practice manual or discretionary approaches to make sure that they are still capable of arriving at solid decisions without the help of the robot.
When it comes right down to it, a Forex Trading System is only as good as the trader using it. This is why individuals are advised to always be mindful of the different strategies in Forex in order to make the right decisions when manipulating systems – both mechanical and discretionary.
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