Tools and Tips You’re Going to Need
While the forex market is one of the oldest and most reputable markets in the world with the largest active trader base out of any other market. In recent years, the craze around it has reached new levels. This comes down to two main reasons. First is the facilitation of online trading compared to previous decades. Where trading in Forex required you to physically refer to a forex broker.
The second fact also has to do with the Internet and the flourishing of what can be described as the “hustle culture. With the rising popularity of markets such as crypto, naturally. The conversation has also extended to include other markets such as Forex. As the largest market in the world, Forex certainly was not in need of this influx of new traders. Still, they are here, and any good trader knows that more traders mean more volume and liquidity. Which is always good and never bad for the market.
In recent years, we have also witnessed the rise of bots in forex trading. Which has led to a new wave of
“automated forex trading,” with minimal or no human involvement in the process of technical decision-making. But what is this method, and how can it be used to make passive income?
Automated Forex Trading
Automated Forex Trading is the same as normal forex trading, with the notable difference that the better judgment. That is used to make buy and sell decisions is no longer in the hands of the human who has provided the capital to enter the market. But rather in the hands of an AI-powered robot which will use its advanced computerized abilities to come up with algorithms to understand the market and determine the ideal entry and exit points in the market. There are, of course, certain advantages to this, but they are also considered to be taken into account.
Forex Bot Trading Essentials
Since activity in the forex market has a direct correlation with your financial gain or loss, it is highly advised to take into account the essentials of what you are going to need to make a successful automated forex trading operation. Here are three essentials that you are going to need if you want to try automated forex trading.
VPS for Trading
One of the main advantages of automated forex trading is the fact that it has no running session time limit as opposed to if a human was in charge. While this directly translates to more frequent opportunities to make capital gains, it also means that a computer is needed to run the scripted bot that is going to trade for you 24/7. This is resource intensive and by all means inefficient to run on your personal computer. A virtual private server or VPS is an amazing alternative. Cloudzy not only has excellent connection latency and customer support, but they also have a tailored package that is one of the best Forex VPS for traders out there.
MT4
Next is Metatrader4 or MT4. MT4 is your primary gateway and online broker that is going to enable you to trade in the different forex trading sessions. You are not limited to using MT4. There is a successor in the form of MT5 and even a lot of other trading software options from other brokers. However, MT4 has truly stood the test of time and is the quintessential trading platform and, therefore, my recommendation, especially if you are a beginner. Backtesting Strategies
Backtesting is the process of running your strategies in a non-capital market in order to test their validity.
A Backtesting strategy is an essential part of skipping much of the early losses that beginner traders often suffer. Use demo accounts on websites such as Tradingview, and you can also do it on MT4 itself. Backtesting your strategies will allow you to thoroughly test and improve them before actually engaging in trades that could be damaging.
Trading with Forex Signals vs. Automated Trading
In recent years much of the signals that are provided online in exchange. For subscription fees are no longer detected by humans and are provided by advanced trading bots. This means that if you use a decent bot, much of the signals that you will receive will overlap and have similarities to that of the aforementioned online signal providers. This, in turn, means that if the technical aspects of maintaining a bot and the process of trial error are too much for you. You can instead choose to subscribe to a reputable online signal provider instead for a similar monthly cost. If that is the case for you, then check out list of the best forex trading signal providers. You will definitely find some great options.
Why Use a Forex Trading Bot
If, however, you find using a trading bot for trading autonomy more appealing. It’s good that you chose to stick around because here are three more reasons to use a forex trading bot!
24/7 Trading
As already mentioned, one of the main advantages of using a forex trading bot is the fact that it will work 24/7 in order to get your capital gain. A human will easily be exhausted and, if pushed to the limit, may be able to sit through an entire day of trading which will involve a single London/New York overlap and a single Sydney/Tokyo overlap. However, a bot will keep on going without any limit. This enables it to use many opportunities that a human would miss in order to make even better trades.
Emotionless Trading
By far, the biggest trap that any trader falls into is the pit of their own emotions. This is not even exclusive to beginner traders and even veteran traders. Sometimes see themselves biting on nails during crucial or large open positions. The fact that a forex trading bot will perform emotionless trading is useful for beginner traders. As it gets rid of the number one contributing factor to unsuccessful trades immediately. Even if mistakes are made by the bot, you know that the reason is solely technical, and you can fix it.
High Speed and Efficiency
Even when a veteran trader sits at the desk to trade, the comparatively slow speed of the human brain. Makes him lose on hundreds of profitable points of entry and exit. The high speed and efficiency of a trading bot is powered by a capable AI. Makes it capable of rapidly responding to potentially profitable buy and sell opportunities. Forex trading bots are already more efficient than most humans in making the right call in the market. Given a few years more time, they will increase this efficiency even more. To the point that humans simply won’t be able to compare.
Conclusion
There are so many tempting opportunities in the online world to make some passive income. Trading in the forex market is one of the most tempting of these opportunities. Sadly, this means that many enter without preparation and suffer losses. Make sure you don’t repeat that mistake, and prepare yourself with these tips and tools!
