How To Choose Forex Trading Software
The foreign exchange market is worth many trillions and one needs to be very vigilant and logical for making profitable trades. The best strategy for trading in the forex market is to trade whenever an opportunity arises. However, for a trader, it is impossible to be so watchful all the time.
Thus, forex traders use automated software. Trading with forex software is also known as black-box trading, robo trading, or algorithmic trading. This has become an indispensable tool for forex traders. This software offers many benefits. With this software, a trader can set some parameters. Based on these parameters, the software will scan profitable currency trades even in the absence of the trader.
Working Of An Automated Forex Software
FX trading software is integrated with programs that help to assess the price charts of the currency and other ongoing market activities over multiple timeframes. Based on these activities, the software will generate signals that include price trends, news, and spread discrepancies that will affect the market. With these signals, traders can find potential profitable currency pair trades.
Before You Automate Your Trading
With the word “automated software” you may think that things will become easier. However, that’s not completely true. So, you must first ensure that you need trading software. Ask yourself certain questions before purchasing forex software.
- Firstly, assess that you need software. Trading software promises to make money but it can take longer than you imagine. So, is it better to trade manually or you must indulge in something which is complex and for which you do not have any experience? Think about it.
- If you have decided to buy one, know what you are getting into. Try to learn the ins and outs of the whole system. Before turning towards complex strategies try to keep your goals and strategies simple.
- There is no one-size-fits-all software available in the market. You have to find out your strategy first and customise the software according to your situation.
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Selecting A Forex Trading Software
There are numerous trading software options available in the market. Each one is different with its pros and cons. If you are lucky to pick an automated trading software, you can potentially make thousands of dollars. Trading firms will advertise about 95% of winning trades in their advertisements of software. They would also share the reliable trade history of those programs to verify the efficacy of the software. However, good performance in the past does not necessarily mean positive results in future. Thus, you should be aware of many things while choosing the forex trading software.
Here are some key selection criteria that you should consider before picking the automated programs.
Pick one based on your requirements: There are different softwares available based on speed, programmability, performance, and ease of use. Thus, the software that is going well with your friend doesn’t need to go along with you as well.
For example, you may want a program that generates reports and impose stop loss, trailing stops, and other market orders. You also want real-time monitoring. However, new or less experienced traders look for a simple program with set and forget feature.
If you are a traveller, you want remote access to your program when not using a computer. For such traders, the most practical and useful solution is a web-based program as these can function with a wi-fi. On the other hand, for serious forex traders, the virtual private servers may be worth considering. With this service, one can access their software quickly, isolate the system for security purposes, and has strong tech support.
Check for fees and guarantees: Some firms charge trading commissions and additional fees for the program they offer. You must check this before taking buying their software as this fee can affect your profitability.
Also, some firms offer return guarantees on purchased programs for a specified period. If you think the software is not giving you desired results, you can return that to the firms and ask for a refund.
Further, it is also recommended to check online customer reviews of the programs to verify their credibility. Some firms offer a free trial period of the software while others offer incentives to buy programs with them. Some of the other firms provide free demo to make you understand its features.
Do a test drive: Forex trading programs are quite costly and thus you must do a test drive before actually buying one. Ask for screenshots and videos of the programs. You must also ask for videos that take you through the account action with trade price, show you buy and sell transactions, time of execution, and profit posting.
Make sure that you run a tutorial to see if it answers all the questions. In case of any issues, call the helpdesk. A knowledgeable and experienced support system will try to make the trading experience seamless. Verify that the “help” link is working in the software.
Some firms also provide no-obligation test options for their software. With this, you can be sure whether the program is good or not. Also, make sure that your program is flexible and easy to install in your default settings.
Pick User-friendly software: Make sure that the software you choose is easy to understand. This becomes more important if the program is designed to handle different markets simultaneously. Thus, your software should be easy to customise and you can set all parameters inline within the software.
Make sure it offers Security: Working on the automated forex trading software involves sharing your sensitive information. This should not get leaked. Thus, choose software that guarantees the security of your information. Make sure that it is a web-oriented system and has a 128-bit label for perfect security.
It should Provide real-time information: Timing is very important in forex trading. The prices can rise or fall within seconds. Thus, you must invest in software that gives you correct information from the beginning to the last.
It should offer 24/7 Customer service: If you encounter any problem in the program, your trading software forms should offer you immediate customer service. In-fact, you must get 24/7 support of their customer service through any of the media forms be it email, phone call, or live chat.
It should Summarise data: Your software must provide you a detailed list of past transactions and also give you an option of taking print out. With this history, a trader can study his trading procedure, spot any flaws and try to fix them for future trading transactions.
These are just a few points which traders much consider when looking for a trading software. However, your needs may vary and your aim should be to find a program that suits your needs the best. And remember that it is just a tool of trading. It’s you who need to make real use of it by setting desired parameters.
The Advantages of Automated Forex Trading Software
- Firstly, it eliminates all the emotional and psychological effects on your trading decisions. The software purely works on the logical approach. Sometimes, traders make buying or selling decisions based on their psychological thinking. However, the software allows you to make decisions on facts related to market conditions and the set parameters.
- For traders who make trades based on currency spreads rather than based on interest rates, trading software is very effective. As the price discrepancies appear clearly, the software instantly reads that and triggers a trade.
- With trading software, you can trade multiple accounts and different strategies at one time. With this, you spread your risk along with several instruments and create a hedge against losing positions. Further, the software can look for opportunities, generate trade orders and monitor them in a fraction of a second.
- The software allows you to enter and exit a trade within a few seconds. This fast entry and exit make a huge difference. As soon as you enter a position, it automatically generates profit loss targets and protective stop loss.
How To Avoid Scams in Trading Software
With innumerable automated software options available in the market, it is quite obvious there will be scams. If you think that a particular software is too good to be true, it is better to do some scrutiny. A lot of firms will offer programs promising high profits at low prices. Beware of such promises.
Here are few tips through which you can identify whether a program is legitimate or fake.
- Scrutinise all the deliverables you are being offered for the purchase price. Don’t hesitate to ask questions. A little hesitation can make you lose money in the end.
- It is better to do some research to know everything about the system. Always read terms and conditions before you commit.
- Browse third-party sites and financial regulatory sites for reviews.
- Make sure that the system comes with a trial period. In case of a lot of rogue providers, there is no trial period of the programs.
No matter whether you are a beginner, experienced, or expert forex trader, automated software is helpful for sure. However, keep one thing in mind; you should not depend on the software completely. No software can guarantee you successful trades continuously.
Forex market is always associated with some risks and software can help you avoid some of those serious risks to prevent losses. So, before choosing any software, have a clear idea of what you are looking for from that software.
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