Automated Trading and How to
Increase Efficiency for Forex Trading
The forex market is one of the biggest entities of its type anywhere in the world, with the global space now worth in excess of $1.934 quadrillion and estimated to be 2.5x larger than the world’s total GDP.
This has been driven by a huge rush to market by new and less experienced traders, who have been empowered by technological advancement and a raft of innovations that have broken down many historic barriers to entry.
In this post, we’ll explore this concept further while asking how automated trading and similar technologies can optimize efficiency for forex trading around the world.
The Challenge of International Forex Trading
As a novice trader, it can be hard to get to grips with the mechanics of the forex market, while a fundamental lack of determinism and practical experience can make it difficult to create a consistent strategic direction.
This issue can become even more pronounced when trading across international borders, with the forex market split into three different geographical sessions and defined by highly variable currency exchange rates.
The international nature of the marketplace is challenging, not least because it can be occasionally difficult to monitor trends and price movements that occur outside of your normal working or waking hours.
For example, if you want to trade Asia-Pacific currencies such as the safe haven Japanese yen or the Thai baht, you’ll need to understand that these assets are most active during the Asian session (which is unofficially open between the hours of 23:00 and 8:00 GMT).
With this in mind, you’ll need a viable strategy and comprehensive understanding of the marketplace if you’re to achieve success, and one that takes advantage of the numerous technologies now available through contemporary online trading platforms.
The Rise of Automated and Algorithmic Trading
This is where the concept of automated trading comes into play, as this can be used to optimize your individual trading volume and drive more informed (and successful) orders over time.
This leads to optimal levels of profitability for traders, primarily enabling them to target the 24-hour forex market and popular Asia-Pacific currencies during periods when they’re most likely to witness high volumes and inflated levels of volatility.
In order to leverage automated trading effectively, you’ll need to use established tools such as the MetaTrader 4. This advanced platform makes it possible to trade a host of markets simultaneously, while creating customizable profiles and building a unique automated trading strategy that allows you to actively capitalize on the forex market’s innate volatility.
This type of platform also offers you access to intuitive risk management measures such as stop losses. These work by automatically closing positions once they’ve incurred a predetermined level of loss, which can in turn help to preserve your capital holdings when speculating out of your normal hours.
Through platforms like the MT4, you can also access a raft of major and exotic currency pairs, allowing you to create automated trades that feature the Thai baht.
