Automated Forex Trading System

An automated forex trading system provides traders the ability to execute their trade on the spot forex market automatically and at anytime of the day. These automated systems can be considered as "smart" systems because the transactions are based on existing technical indicators and custom trading rules.

There are several features that are included in an automated trading system:

• Automatic trailing stops if a trader is losing in a particular position;
• Account equity management;
• Stop/limit orders;
• Discretionary market orders;
• Several technical analysis indicators allowing you to execute trend-following systems.

A successful automation process can be based on the following capabilities:

• Execute trades in real time. This allows a trader to close trades in a matter of seconds. Doing this in manual systems is near impossible. There may also be instances when a trader incurs several losses in a row, thus preventing the trader from making any new transactions. Tis problem could be avoided in an automated system.
• Offers greater diversification and flexibility. One such advantage allows a trader to conduct trades in various locations, in varying time zones.
• Analysis of short-term data. This allows traders to predict market trends swiftly, usually in less than an hour. Again, this capability is near impossible in a manual system.

Also to be sought out in an automated system is support for most of the following indicators:

• 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 speed of automated forex systems is quite astounding. Evaluating exchange rates and market conditions could be done in a matter of a few minutes because forex data are now updated in real time. In less than an hour, you mgiht already be able to take a position as to whether to deal or not.

If a trader averages a trade an hour, a single trader can place as many as eight trades within the regular trading hours. There can even be additional trades beyond the regular trading hours. This is not at all unusual as there are thousands of traders in a single market who can average this number of trade per day. With technology changing continuously, there is a possibility that the average number of trades per day will increase. All this thanks to the automated forex trading system.