Why are Automated Trading Strategies becoming so popular

I believe that in order to judge the true efficiency and performance of a trading system, one need to trade every set up that it offers, not just the ones that occur when you happen to be at your trading desk. If you apply an automated trading system to your trading you will be able to accurately assess your system to determine its effectiveness. Trading programs are a very effective means of eliminating errors and emotions from your Forex trading. For this reason alone, many discretionary traders moved over to automated trading programs.



Automated
trading strategies are becoming increasingly popular amongst private individual
Forex traders. In a recent study conducted by IBFX 94 of traders said that
they would use the same or increase the amount of automated trading they will
perform in the next twelve months. Only 6 stated that they would decrease
their use of automated trading strategies. On top of that the study also showed
that as of September 2010, 56 of all trading activity on the New York Stock
Exchange was high frequency, or computer automated trading.



In 2004
Algorithmic trading made up a mere 4 of total Forex trading. By 2007 this
figure had risen to 28 and estimates are that currently around 50 of all Forex
trades are automated and these figures are expected to continue to climb
rapidly. There is no doubt that automated Forex trading systems are gaining in
popularity.



The
main reason for this growth in automated trading is technology. As technology
is a driving force in most other fast moving sectors, so it has had a huge
impact on Forex trading systems The first major step towards the development
of auto trading systems was the move away from floor trading to computerised
trading. Once this occurred trading firms developed their own trading systems
to place orders through the new electronic exchanges.



Retail
traders now have access to technology that previously was only available to
these large banks and institutional trading desks. With the highly advanced
trading platforms now available to individual Forex traders around the globe,
they can now compete on an equal footing. As traders began to implement
automation in their Forex day trading systems
they soon realised the huge opportunities that they presented. Traders began to
share ideas and approaches and now automation is the way of the future for
individual traders.



Automated
strategies will improve your performance as your auto system is able to follow
more markets, more efficiently, more of the time. Manual trading is limited to
the number of hours you can stay focussed in a trading day. Realising this,
many long time manual traders have moved over to Forex auto trading programs.



Automated trading systems are so much more efficient as
they require less human intervention and therefore less cost. Traders may only
have a few hours to spend on their trading each. An auto trading system will
allow parttime traders to trade full time by trading the market on their
behalf. Traders then just need to monitor their systems performance. Day
traders are now able to focus more on research, system improvements and keeping
up with market trends rather than sitting in front of their trading screen
waiting for the next set up. This serves to improve their overall performance
by focussing on important issues, not merely the mundane tasks.



I believe that in order to judge the true efficiency and
performance of a trading system, one need to trade every set up that it offers,
not just the ones that occur when you happen to be at your trading desk. If you
apply an automated trading system to your trading you will be able to
accurately assess your system to determine its effectiveness. Trading programs
are a very effective means of eliminating errors and emotions from your Forex
trading. For this reason alone, many discretionary traders moved over to
automated trading programs.



Forex auto systems have become easier to build due to the
availability of universal scripting languages such as MQL4 or Ninja script.
These programming languages are not difficult to grasp and once you understand
them, the possibilities are endless in terms of automated trading system
development. Spend some time learning how to build your own auto trading
program and you will then have the skills to create multiple systems for
different markets, with unique objectives and targets. Professional traders
have learnt that their time better spent in development than in implementation
and for this, automated trading is the answer.