The forex market, or Forex, is one of the largest markets in the world in terms of both volume and number of transactions. Forex certainly offers many opportunities to earn a considerable amount of money and do it quickly.
However, there is also the same amount of risk in losing so much and at the same speed. This article aims to introduce you to automated forex trading to improve your chances of survival and success in this relentless market.
Importance of psychology in currency trading
There are many business strategies you can adopt or develop to maximize your chances of success and offer you better chances of survival. Regardless of the strategy you choose, however, psychology plays a key role in the success or failure of any forex trader.
It is the psychological aspect of forex trading that most traders find the hardest part to master. It is estimated that less than one in ten Forex traders survive to succeed in this market. The main factor in the failure of the vast majority of people trying Forex is the psychological aspects of trading.
Even new traders who have followed the recommended steps to get started tend to suffer from the mindset. They have done their research on the basics of currency trading; they have opened a demo account; they have tried several strategies; and chosen the one that has provided the best returns. However, even with all the preparations, when it comes to negotiating with your real money, it is a completely different story.
Opening a trade too soon, closing it too late or vice versa is common for the inexperienced trader. The results? The “perfect” strategy that worked every time in the demo account suddenly implodes and your capital starts to dwindle. Of course, it’s not strategy that implodes; it is the trader’s reaction to the psychological aspects of trading his precious capital.
Automated currency trading
One of the significant aspects of forex trading is that the process can be automated. Doing so takes away all the pressure from the trader and his overly human flaws! Automation puts operations in the hands of an expert advisor (EA).
So what is EA? It is MQL-programmed software designed to work in connection with the Metatrader currency trading platform. It is deployed by connecting EA to the corresponding trading chart and letting it perform trades according to your strategy.
The beauty of EA is that it will execute your operations automatically, without hesitation as a human trader can. It will fulfill your strategy without suffering the psychological aspects of forex trading which produces nine out of ten failed traders. It will continue to trade 24 hours a day (as long as the markets are open), as long as you keep it online.
Programming and Configuration of an EA
You can learn MQL yourself to program your EA or hire a computer programmer to do it for you. You can find very reasonably priced and talented programmers at places like Fiverr or Upwork.
Once you have your EA scheduled, you should put it online and let it run throughout the day. Instead of having your computer running permanently, 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 might even find a broker that offers a free VPS service. Once you have your VPS, log in, install MT4, connect your EA to the corresponding trading chart and start operating automatically.
Optimize your business
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 the MT4 Trades copier programs. These programs copy Forex trades from one MT4 platform to another and you can configure the program to copy only successful trades.
You want to install two MT4 platforms, one for your real money account and one for your demo account. The EA runs on the demo account and the copier program is loaded on both MT4 platforms. Configuring the copier program to copy only successful operations (positive value) will significantly increase the proportion of successful operations. All your losing trades are kept in the demo account, and this is the best place for them!