Automated Forex Trading is becoming an increasingly integral part of many traders approach to trading the currency markets. Particularly for those who are new to the Foreign Exchange markets, the lure of generating high profits from this simple method of trading proves particularly attractive. Technical advances in recent years have made this approach possible. However it is wrong to assume that you can simply pick any system to set yourself on the path to riches.
There are several things that you need to look for when choosing an automated Forex trading program. By taking the time to do your homework you can avoid many common pitfalls and help to ensure that you end up with a profitable system that will deliver on your requirements.
• Look for an automated Forex trading system that is both easy to understand and configure. While most systems will aim to accommodate on this front, if you are new to trading or lack computer literacy you can still run into problems. Therefore it pays to use a system which provides comprehensive instructions or tutorials to assist you in the installation and setup process.
• Take account of the cost of the system. This is a fundamental step that many traders overlook. There is little point in trading a $100 dollar account with the expectation of making a 20% return in a year. Even if the strategy performs as expected, it will take you years to recoup the initial purchase price which somewhat defeats the purpose of using the system in the first place.
• Try to find a system with the ability to customize the software. While you may not need this facility initially it will allow you to adjust the systems settings if performance dips. Currency markets tend to evolve rather than change, but the ability to keep your software up to date with the changing market dynamics will help to ensure that your system does not quickly end up obsolete.
• Similarly look for automated Forex trading systems where the vendor is willing to provide regular updates. Not only does this highlight the vendors desire to improve the system. After all, most software will require regular updates in order to maintain performance. In addition to resolving any reliability issues that may occur, vendors will often include updates that can increase the functionality of the system such as adding the ability to trade additional currency pairs.
• Check the drawdown figure for the system. Drawdown represents the level that the system will eat into your trading margin on its open trades. Just because a system may be profitable it does not mean that it can’t blow your account with the drawdown level incurred on open trading positions.
• Try to make use of a system with a have money-back guarantee. Results on vendors’ websites can often show a system to be a top performer but you may experience functional or performance issues when you actually come to use it. Your guarantee period will allow you to try out the system on a demo in order to see if it meets with your requirements. If it doesn’t then you can simply return the system for a refund.
Of course even if your system meets the above criteria you are still not guaranteed immediate success. However by being patient and learning from your trading experiences you can will soon be able to find those automated Forex trading systems that are able to deliver you a profitable return on your trading account.