The foreign exchange market, or Forex, is one of the largest markets in the world in terms of both volume and amount of transactions. Forex certainly provides many opportunities to make a significant amount of money and make it fast.
However, there is also the same risk of losing just as much at the same rate. This article aims to introduce you to automated Forex trading to improve your chances of survival and success in this relentless market.
The importance of psychology in Forex trading
There are many trading strategies that you can adopt or develop to maximize your chances of success and give you a better chance of survival. Whatever strategy you choose, psychology plays a crucial role in the success or failure of any Forex trader.
The psychological aspect of Forex trading is what 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 majority of people who try Forex is the psychological aspects of trading.
Even these new traders who have followed the recommended starting steps tend to suffer from thinking. They have done their research on the basics of Forex trading; they have opened a demo account; they have tested several strategies; and chose the one that provided the best return. However, even with all the preparations, when it comes to trading their real money, this is a completely different story.
Opening a deal too early, closing it too late or vice versa is common for an inexperienced trader. The results? The “perfect” strategy, which works every time in the demo account, suddenly falls apart and your capital starts to decrease. Of course, strategy does not fall apart; this is the trader’s reaction to the psychological aspects of trading their valuable capital.
Automated Forex Trading
One of the important aspects of Forex trading is that the process can be automated. This removes all the pressure from the trader and their very human shortcomings! Automation puts transactions in the hands of an expert advisor (EA).
So what is EA? This is MQL-programmed software designed to work in conjunction with the Forex trading platform Metatrader. It is deployed by connecting the EA to the relevant trading chart and allows it to execute trades according to your strategy.
The beauty of EA is that it will manage your transactions automatically without hesitation, as a human trader can do. He will follow your strategy without suffering from the psychological aspects of Forex trading, which produces nine unsuccessful traders out of ten. It will continue to trade 24 hours a day (as long as the markets are open), as long as you keep it online.
EA programming and setup
You can learn MQL yourself to program your EA, or hire a computer programmer to do it for you. You can find talented programmers at very reasonable prices on sites like Fiverr or Upwork.
When you have a programmed EA, it should be launched online and left to work around the clock. Instead of running your computer all the time, consider using a virtual private server (VPS).
A VPS can be located anywhere in the world and allows your EA to run 24 hours a day for about $ 10 a month. You may even be able to find a broker that offers a free VPS service. Once you receive your VPS, log in, install MT4, connect your EA to the appropriate trading chart and start automated trading.
Optimize your trade
Regardless of the effectiveness of your strategy, you will always have some losing trades. The key to success is to optimize your EA so that you minimize these losses. To do this, you can use MT4 transaction copying 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. EA is launched on the demo account and the copy program is loaded on both MT4 platforms. Setting the copy program to copy only successful transactions (positive value) will significantly increase your share of successful transactions. All your losing trades remain in the demo account – and this is the best place for them!