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Forex: Robots Vs. Humans, Automated Trading vs. Trading Manual

Currency (FOREX) market is the largest financial market and more liquid in the world. The average daily traffic in the global FOREX markets exceeds U.S. 1.9 trillion U.S. dollars (Source: Central Bank of the Triennial Survey of Foreign Exchange & Derivatives Market Activity conducted by the Bank for International Settlements (BIS) in April 2004 and published in March 2005). These huge funds are negotiated by governments, banks and large institutions. In comparison, the largest securities market in the Earth - NYSE Group (The New York Stock Exchange), has a daily trading volume of approximately 86.8 billion dollars (Source: NYSE Group, Inc. 2006). FOREX has a 18.4% average growth rate of per year since 1989. That trade offers 24 hours a day, five days a week without stopping through the Internet. This type of bulk liquid and long uninterrupted trading hours mean that under normal conditions of no problem to enter or exit a trade.
But in this huge market, such as history, at least 90% of new forex traders lose all their money in the first 3 months negotiation. Why? Most losing traders who inquire about Forex trading are very intelligent, they simply lack the tools entitled, "Secret Weapons" to win. They are not beaten by other traders, they simply are beaten by them, by the weakness of human beings.

Talking about the weaknesses of human beings, we will enumerate some as follows:

1. What is the first major weakness of human beings? if I say he should be the "greed", is there anyone who disagrees? Many times we have 1% profit, but we believe that not enough fat. We want more, 2% or 3% will be better. While the benefit is really going to 3%, let's think about how about 10%? It is not enough for all. But the market is so volatile, especially in the foreign exchange market, we often find this depressive situation: non-profit becomes negative from positive. and this type of depression that occurs and again.

2. Fear. All people are afraid. In the Forex market, exchange rate is easily jumping or falling hundreds of pips. Few people can make sure of how the market will go. In the Forex market, all the people for trade leverage of 50:1 to 500:1, the leverage will extend the gains or losses of 50 times to 500 times. Leverage is the wonderful feature of the currency, and bring fear into the hearts of the people too. If the market goes against the people, reduction is large, their fear is well. Does anyone not afraid to lose money? Under the pressure of fear, the simple and often make bad decisions, stopping lost too soon, then soon regret.

3. The lack of confidence. That looks better than fear, eh? But still not a good thing. Many times human operators are so happy once they see little benefit in their accounts. Are worrying what if the benefit becomes lost? People always have a small gain and run, then weigh, as they see the market goes further and further along the track. If you trust, would have been ten or even hundred times profit.

4. Hesitation. Not only novices but also old-hands easily hesitate to act in the Forex market. You've probably heard the saying "Past performance is not to predict future performance. Even a very experienced operator who has made many successful operations in its history, while he or she faces a new situation, needs to think twice before making a simple decision: to sell or buy? For newcomers or fans, who need more time to think, and this type of question always leads to confusion and lack the best chance and fleeting.

5. Tiredness. How many people can continue working for 24 hours? No sleep, no rest? How about 48 hours, 72 hours, etc? Even an iron man can not use their eyes on the computer monitor, rapidly changing their thinking brain and hands questions calculation of complex formulas, day and night, 24 hours a day, 6 days a week, nonstop. Especially, no mistakes allowed!

No one can!

None!

No doubt!

Not to mention Superman. He also tired.

6. Negligence. Did you ever have problems just because of negligence small? as I took a wrong bus, missed an exit on the road, hit a number wrong, wrong for the boss', not ignored a parking sign is omitted a whole page of questions on an exam resume left at home while an interview vital misspelled a key word in a quotation form for a VIP, etc. Hey, man, when was the last time you forgot the birthday of her mother, or worse, the wife, or worse, the girl friend? Mom always forgive their negligence. Wife ... Well, it depends. Amiga? Huh, we good luck.

But unfortunately, in the Forex market, nobody will forgive their negligence, even yourself. Any negligence should be punished! You could receive a margin call, only pennies left in the account, you can just because a small oversight.

7. The lack of discipline. Human beings always think they are smarter than machines. Sure. Not only are more intelligent, we are free also. But everything has its nature, character, and rules. Rule means discipline. If you only feel smart and free trade in Forex, making decisions based on our feelings or knowledge only and ignore discipline, there will be endless disaster lies ahead. Forex is like fighting the war, soldiers can not survive in the war, without the discipline, can not the traders in the Forex market. While we have to stop the loss we have to cut and run, despite the bloody and painful it is when we have to make profit not may hate the benefit is too small. Discipline is discipline, perhaps some Smarties can win a while, but only people can keep forever obeying discipline can always win.

8. Inconsistency. Long or short term to long term? buy or sell? prosperity or depression? bought or sold on? high or low? level of support or resistance? fundamental or technical analysis? including trade automated or manual trading? etc. There are too many inconsistent news facts, information and methods, strategies in the Forex market, traders easily cause human judgments and decisions are inconsistent. And these inconsistencies will only the same result: failure!

To overcome these terrible weaknesses of human beings, people have developed many methods. One of them is called "Automated Trading. "Automated (or Automatic) Forex Trading means trading Forex (currency) using some trading systems, programs, software or bots (in Metatrader MT4 platform is called as expert advisers - EA), without a human being physically trade. An automated trading system is a set of rules and parameters governing the entry and exit, having the ability to both generate signals and perform operations automatically. An EA is an automated trading "robot". The robots can beat humans at chess games, EA robots can beat humans in FOREX trading also.

Developers consider many synthesize components while they are developing an automated trading system or EA robot, including: Market Nature, Math Modeling, Time Frame, the signals input and output, Stop Loss Trigger, and profit, etc. After the system was created, they do it again rigorously tests and trials forward, both in the accounts demo and live. A fully automatic trading system like the one created in this manner is capable of analyzing the market independently complete work on its own and constantly generate signals, auto-running on a platform. Alternatively, developers can design the system as a "semi-automated" by the which users can receive alerts when entry, exit, Stop Loss or Take benefit trigger. The audible alerts can be via computer, sent to an address e-mail or even send a message to your cell. Once the user confirms, the robot will obey the order to complete the trade.

There are many Automatic Forex Trading advantages such as:

1. Automated negotiation is executed by the computer. Today, computing and technology information have been developed to a very high level. Computer can perform calculations thousands of times faster than humans, estimates of the training Naturally, without error and store memory at incredible speeds, with impeccable precision.

2. Taking the emotion from trading. Unlike of human beings, an automated trading system will never be misguided by greed, fear, hesitation and inconsistency. It just trade mechanically (but fully programmable), unaffected by a ™ € s Tradera psychology. It is performed on the basis of the criteria and disciplines. Obviously, this reduces the risk of panic trading.

3. Automated negotiation operations can take day and night without stopping, without fatigue and carelessness. Robots EA free their owners need to stick to the front of the computer at all times. Once an effective system is developed and optimized, there is no need to run automatically and complete independently. A successful automated trading EA robot will allow its holder to focus on optimizing strategies and money management rules instead of having to constantly monitor the market.

4. Computer can run multiple programs simultaneously, so that you can use automated robots EA to have multiple sales offices synchronously. That means it can include multiple conditional entries and exits, profit targets, protective stops, behind the stalls, and more in our strategies, and all have automated the same time. This powerful feature can help us maximize our return on investment and reduce risk.

5. For day traders or other followers of the short-term trading, automated trading bots tools are very useful to deal with the high frequency of operations from the tick data. Day trading keeps traders in the market exposed in a short time, so sometimes it is safer than long-term trade, but it is really difficult for a human to handle. However, for automated trading EA robots, is only a piece of cake.

6. No matter long or short term trading, Forex market is always volatile and fast waves, automated negotiation can only afford faster identification of signals and the response to them. Without doubt, the teams usually beat humans at the speed of identification of a signal input and negotiation and execution of relevant orders. No more missing a trading opportunity.

Automated Commercial not perfect yet, and EA robots can not think instead of humans. If the developer skills are at a low level, or the idea of the strategy is unsustainable or logic, a product will not succeed. However, practical experience shows that a high quality automated trading system always ensures some kind of financial success of its owner works in the Forex market. The latter fact is: in the Automated Trading Championship 2007, global competition, all participants use EA robots, the champion won 1204.75% of earnings, won the runner-up 450.42% and 299.45% won third place, only 12 weeks.

Is not it amazing?

About the Author

If you would like to find out more about Forex trading, come and visit us at VDUX.com

If you want to download our Raingull Automated Trading Software EA, please come to Raingull.com

(AFX UK Focus) 2010-03-19 02:45 Thai stocks seen range determined, the flow of fund to support BANGKOK, 19 (Reuters) - Thai shares are expected to trade in a narrow band on Friday, with internal political turmoil continues to weigh on confidence, but continued foreign capital inflows for periods 18th previous sessions provide support.

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