The Foreign Exchange, or Forex, market is one of the world’s biggest markets in terms of both volume and transaction amounts. Forex certainly provides plenty of opportunities to make a considerable amount of money and make it quickly.
However, there is also an equal amount of risk in losing just as much and at the same speed. This article aims to introduce you to automated Forex trading to improve your chances of survival and success in this unforgiving market.
Forex-Importance of Psychology In Forex Trading
There are plenty of trading strategies you can adopt or develop to maximize your chances of success and give you a better chance of survival. Regardless of the strategy you choose, though, psychology plays a critical part in the success or failure of any Forex trader.
It is the psychological aspect of Forex trading that most traders find the most challenging part to master. It is estimated that less than one-in-ten Forex traders survive to become successful in this market. The main factor in the failure of the vast majority of people who give Forex a try is trading’s psychological aspects.
Even those new traders who have followed the recommended steps for getting started tend to suffer from the mindset. They’ve done their research into the fundamentals of Forex trading; they’ve opened a demo account; they’ve tested several strategies; and chosen the one that has provided the best returns. However, even with all the preparations, when it comes to trading with their real money, it is an entirely different story.
Opening a trade too early, closing it too late, or vice-versa is common for the inexperienced trader. The results? The ‘perfect’ strategy that worked every time on the demo account, suddenly implodes and your capital starts to dwindle. Of course, it is not the strategy that is imploding; it is the trader’s reaction to the psychological aspects of trading their precious capital.
Automated Forex Trading
One of the significant aspects of Forex trading is that the process can be automated. Doing so takes all of the pressure away from the trader and their all-too-human flaws! Automation puts the trades in the hands of an Expert Advisor (EA).
So, what is EA? It is MQL-programmed software designed to run in connection with the Metatrader Forex trading platform. It is deployed by connecting EA to the corresponding trading chart and letting it conduct the trades according to your strategy.
The beauty of EA is that it will run your trades automatically, without hesitating as a human trader may do. It will abide by your strategy without suffering the psychological aspects of Forex trading that produces nine failed traders out of every ten. It will continue to trade 24-hours per day (while markets are open), so long as you keep it online.
Programming and Setting-Up an EA
You can learn MQL yourself to program your EA or hire a computer programmer to do it for you. You can find very reasonably-priced and talented programmers on sites such as Fiverr or Upwork.
When you have your EA programmed, it should be put online and allowed to run around the clock. Rather than having your computer running permanently, consider using a Virtual Private Server (VPS).
A VPS can be located anywhere globally and enables your EA to run 24-hours a day for around $10 per month. You might even be able to find a broker that offers a free VPS service. Once you’ve got your VPS, login, install MT4, connect your EA to the relevant trading chart, and start automated trading.
Optimizing Your Trading
Regardless of your strategy’s effectiveness, you will always have some losing trades. The key to success is optimizing your EA so that you minimize these losses. To do this, you can utilize MT4 trades copier programs. These programs copy Forex trades from one MT4 platform to another, and you can set the program to copy only successful trades.
You will want to install two MT4 platforms, one for your Real-Money account and one for your Demo account. The EA gets run on the demo account, and the copier program gets loaded onto the two MT4 platforms. Setting the copier program to only copy successful (positive value) trades will increase your proportion of successful trades significantly. All of your losing trades stay on the demo account – and that is the best place for them!
Source by Frank Breitling