In recent years, more and more people have realized the opportunities that Forex trading offers. It is not surprising, therefore, the emergence of new tools to help users invest: among them, automated trading.
Automated trading software can be used to trade a variety of markets including Forex, stocks, commodities, cryptocurrencies and many more. The program simply analyzes the market and opens a trade, so you do not need to conduct it manually.
When it comes to Forex trading, it is always necessary to remember that there are no tricks or shortcuts to earn money in an absolutely certain and guaranteed way.
With this premise in mind, let's now understand what automated trading MT4 consists of and how it works.
In short, it is the possibility of carrying out Forex trading automatically, through the use of specific techniques or programs that trades on our behalf.
This does not mean that the trader's contribution will be zero, quite the contrary. Metatrader 4 automated trading is always based on the trader's decisions and knowledge.
But how does metatrader 4 automated trading work? And what are the pros and cons of automated trading mt4?
In this guide we will explain in detail the dynamics on which automatic trading is based, as well as we will present you the best platforms to start investing immediately.
What is MetaTrader 4 automated trading?
The metatrader 4 automated trading is a software that performs independently of the trading business, based on the parameters previously set by the trader. This automated software uses complex mathematical formulas and models to quickly carry out financial transactions based on the parameters set by the trader. The purpose of automated trading is precisely to help traders carry out certain financial strategies as quickly as possible in order to obtain greater profits.
Many believe that in this way it is possible to earn without doing anything but in reality this is not the case. The software is an aid to the trader's activity but not a complete replacement.
How does automated trading mt4 work?
Automated trading mt4 analyzes market information in order to make trading decisions. This information may include currency price charts, economic news and events, spread fluctuations, and other market activity.
By analyzing this data and using the criteria set by the trader, the software identifies trading signals and generates a buy or sell alert based on them. In this alert, the software can be programmed to automatically execute the trade.
Thus, the functions of Forex trading software may include:
- Market analysis including technical analysis and fundamental analysis based on your trading strategy
- Automatic opening of transactions when the specified conditions are met
- Close open positions in accordance with the specified conditions (take profit, stop loss, reversal ...)
- Risk management by limiting the size of open positions or the number of open positions that you have at the same time
If you have an automated Forex trading strategy, you can program your automated trading mt4 to analyze and trade the markets 24 hours a day, allowing you to exploit all potential trading opportunities.
While metatrader 4 automated trading can be a great tool, keep in mind that using a Forex trading program does not guarantee profits. The results will depend on the strategy used, and a winning strategy may become a losing one if market conditions change.
Metatrader 4 automated trading - Who can use it?
Hypothetically, beginners and experienced Forex traders can benefit from using metatrader 4 automated trading to make their trading decisions, which is why they are looking for Forex trading robots.
Automated trading mt4 - Advantages
Now that we have seen how automated trading mt4 works, let's take a look at what are the benefits of using such tools.
The first advantage of automated trading mt4 is the elimination of emotional and psychological influences when trading. Automated software makes your trading decisions consistent and unemotional using the options or defaults that you set before trading.
Many traders - both beginners and experienced ones - often take trades for emotional reasons. For example, they see a lot of activity in the GBP / USD currency pair and do not want to miss out on a potentially profitable trade. Or they see that a trade is going badly and close it manually before their strategy tells them to do it. With automated trading mt4, emotional decisions and errors associated with them are excluded.
Metatrader 4 automated trading pushes you to clearly articulate your trading strategy, rules, and goals for algorithm programming, so it forces you to set the rules and stick to them!
Further, for currency speculators who trade based on currency spreads, metatrader 4 automated trading can also be effective. This is due to the fact that price discrepancies appear instantly, the information is immediately read by the trading system and, therefore, is instantly executed.
In addition, automated trading mt4 also allows traders to manage multiple accounts at the same time, which is a real plus that is not easy to make available when manually trading on a single computer. This allows you to use multiple opportunities at the same time and work with complementary strategies at the same time. For example, with the metatrader 4 automated trading, you can use a scalping strategy and a different day trading strategy for the same financial asset.
For serious Forex traders who have other interests, occupations or responsibilities, metatrader 4 automated trading can save a significant amount of time that could otherwise be devoted to other necessary activities, such as studying the markets, analyzing various charts or observation of various events affecting the price of a currency.
Automated trading mt4 allows you to free yourself from the constant presence of a computer monitor while the software scans the market, looking for trading opportunities and trades on your behalf.
In addition, automated trading mt4 & 5 apps for iPhone, Android and tablet allow you to easily control your trading account wherever you are.
The last advantage of automated trading mt4 is that various marketing moves by the developers encourage you to buy certain packages of trading instruments, which will certainly give you an edge in the end.
While trading using automated trading mt4 has many advantages, keep in mind that there are disadvantages as well, and they must be reckoned with.
Automated trading mt4 - Disadvantages
Like any other trading tool, automated trading mt4 has both advantages and disadvantages. Let's consider the most significant of them:
Lack of knowledge in computer and algorithmic programming - given the previous point, it is important to understand how your automated trading mt4 works. Unless you have a strong background in programming or computer technology, you are unlikely to be able to get the most out of automated trading.
Your computer must be on at all times. The expert code is executed directly on your terminal, not on the server. (The exception is VPS servers);
The Internet connection is lost or the lights are turned off, and you immediately lose control over trading, over your deposit;
These are the three most common problems faced by newcomers to automated trading mt4. Don't forget to take these considerations into account when creating your trading strategy and algorithm! This will save you from unpleasant surprises.
Metatrader 4 automated trading - Which markets are better to use?
Automated trading programs are not always the same, and it is important to consider the markets you want to trade in when choosing the one that suits you. In particular, it is important to apply your strategy in markets that are more likely to provide good trading conditions as well as consistent movements on a regular basis.
In our experience, auto traders trade in three main markets: Forex, Indices, and Cryptocurrencies. In the following sections, we will discuss the benefits of using automated trading to trade these three markets via Contracts for Difference (CFDs).
Automated trading mt4 for Beginners - Benefits
Enjoy high volatility every day on dozens of currency pairs.
Get round-the-clock access to quotes, trade at any time of the day or night.
Take advantage of the high liquidity in the forex market where nearly $ 5 trillion worth of trades are made every day.
Many automated Forex trading software is available on the world's two leading trading platforms, MetaTrader 5 and MetaTrader 4. These are the world's most popular manual and algorithmic trading platforms.
Automated trading mt4 on indices - Benefits
Automatic index CFD trading is ideal for day traders. Stock markets open and close at fixed times, which means that your trading session may be limited by trading hours.
Take advantage of open market movements and strategies designed to close open market gaps and market ranges.
Tight spread can limit transaction costs, making small trades more profitable.
Indices reflect the news of the economy and large companies. This means that you can choose an automated trading program that is triggered by fundamental analysis alerts.
Automatic trading on the cryptocurrency exchange
In the past few years, due to significant movements in currencies such as Bitcoin, Ethereum, and Ripple many traders are considering automated trading strategies for cryptocurrencies as well.
Cryptocurrencies represent an interesting market for trading algorithms as they experience peaks in volatility on a regular basis. On the other hand, they also experience extended periods of restricted movement.
The advantage of the automatic algorithm is to take advantage of opportunities during peak volatility without the need for constant monitoring of the market. Plus, the cryptocurrency market is open seven days a week!
Keep in mind, however, that the cryptocurrency market is still new and unregulated, so avoid buying any automated trading software designed specifically for the crypto market. Instead, focus on software that can trade in various markets and that can then be programmed to trade cryptocurrency.
Automated trading mt4 - The right time
Best time to use automated trading mt4:
- When economic publications and speeches of major market players are released
- When technical analysis is most reliable
Markets tend to experience significant movements during major publications, which is why many traders specialize in using automated trading based on the economic calendar.
Forex trading software can be programmed to track regular economic events such as the announcement of the US unemployment rate. The software can then open an automated trade by following the movements prompted by the announcement.
Let's look at a concrete example:
- If the US unemployment rate is lower than expected, the automated trading mt4 will start to open long positions in USD and US indices if the price closes above a simple or exponential moving average for a certain period.
- If the US unemployment rate is higher than expected, the automated trading mt4 may enter short trades if the price closes below a simple or exponential moving average over a specified period.
Another good time to apply metatrader 4 automated trading is when technical signals are most reliable. When is it?
The best time to activate metatrader 4 automated trading is when there are no economic events on the calendar, which means that assets are more likely to respond reliably to technical levels such as support and resistance levels.
Automated trading - Which platform is best for you?
It is very important to consider the capabilities of the trading platform that you will be using.
The best automated trading platform must meet three criteria:
- It should be intuitive - you should be comfortable using it.
- It must be functional - do not limit you in your trading strategies.
- It should be highly customizable and professional - you should be able to use it for both automated and manual trading.
There are a huge number of programs for trading in the Forex market, but only a few of them are recognized as reliable. This is one of the many reasons why MetaTrader 4 and 5 are the most popular trading platforms in the world.