What is Automated Trading?
Automated trading systems, also referred to as mechanical trading systems, algorithmic trading, automated trading or expert advisor (EA), allow traders to code and automate their strategy into an automated system.
Once programmed, can be automatically executed via a computer.
The trade entry and exit rules can be based on simple conditions such as a moving average crossover, or they can be complicated strategies with multiple sets of rules for exit and entry.
By having an automated trading system, you certainly do not need to enter in any trades manually by hand. Once you define a strategy and programme it, the robot will enter and exit the trades in accordance to your defined strategy.
How does it work?
A forex robot operates within the popular MetaTrader trading platform to trade fully automated. The robot is also known as Expert Advisor (aka EA) because it “advises” the MetaTrader monitoring software.
Basically, an expert advisor for MetaTrader works by coding predetermined strategies or rules for making trade decisions. The rules are programmed on an expert advisor (robot), which it uses to enter and exit trades on the MetaTrader platform. Robots are capable of making trade decisions in a way that humans can’t.
Robots can effectively scan the markets looking for trade opportunities with high levels of accuracy.
However, it is important to understand that not all trading strategies can be automated, and sometimes manual trading can be much more effective and result oriented. Manual trading can be more effective in monitoring market condition. Traders can learn and study the market and gain useful experience and insight by manual trading.