This article looks at the pros and cons of automated trading on the foreign exchange Melbourne.
There are a lot of people who consider the use of automated trading on the foreign exchange Melbourne. When you look at this you should consider what the pros and cons are of automated trading. There are a number of benefits that you can get with automated trading, but there are also a number of drawbacks. You have to weigh the pros against the cons when you look at this trading. If you find that the drawbacks are too much then automated trading is not the right option for you.
The Benefits of Automated Trading on the Foreign Exchange Melbourne
The use of automated trading on the foreign exchange Melbourne offers a number of benefits. The first is that the emotions of trading are minimised. This is important because you need to avoid emotional trading at all costs when you are on the foreign exchange Melbourne.
The testing of the strategy that you are going to use will be done objectively. As you are going to be using back testing on the automated system there is no chance that your own subjectivity on the matter will impact the testing. Most automated trading systems will have back testing facilities that you can use.
The consistency of your trading will be improved when you use an automated system. As the system is not subject to emotions there will be no need to divert from the trading plan. This means that you are going to have consistency when you trade and this will lead to profits in the long run.
The speed of order entry is higher when you are looking at the automated trading systems. The automated system will be able to enter a trade onto the foreign exchange Melbourne much faster than you can manually. This means that you are going to be able to get into the movement a couple of seconds faster and this can make a major difference in the results of the trade.
The Drawbacks of Automated Trading
There are a number of drawbacks that you have to consider when you look at these systems. The first is that they are subject to mechanical failure. There is no way to ensure that the system never has mechanical failure as this is something that all technology is at risk of. When there is a mechanical failure the trades that you have could be distorted and the system could shift slightly. This means that the trading the system does from this point could be different to what you want it to do.
Another drawback with automated trading is that you do have to monitor it. There are many traders who feel that automated trading does not need to be monitored. However, due to the mechanical failure that you can face it is best to keep an eye on what the system is doing. You do not have to watch it all the time, but check every once in a while is not a bad idea.
The last drawback is that the system could be over-optimised. This means that you have changed your trading to ensure that is to 100% profitable with back testing. This does not mean that the system will be as profitable on the live market and this could make it less so.
Get a free Forex PDF PLUS:
- 14 Video Lessons
- Free One-on-One Training
- A 5000$ Training Account
- In-House Daily Analysis
- Get FULL ACCESS