Automated Forex Trading

AAA

DEFINITION of 'Automated Forex Trading'

A method of trading foreign currencies with a computer program that is based on a set of analyses that helps determine whether to buy or sell a currency pair at any one time. Automated forex trading uses a computer program that the trader "teaches" to make decisions based on a set of signals derived from technical analysis charting tools. The signals create a buy or sell decision when they point in the same direction.

INVESTOPEDIA EXPLAINS 'Automated Forex Trading'

In an automated forex trading system, the trader must teach the software what signals to look for and how to interpret them. It is thought that automated trading takes human psychology out of trading.

Automated day trading systems and signals are available to purchase over the internet. However, it is important to note that there is no such thing as the "holy grail" of trading systems. If the system was a perfect money maker, the seller would not want to share it. This is why big financial firms keep their "black box" trading programs under lock and key.

RELATED TERMS
  1. Manual Execution

    A method of trading with the help of a dealer or broker, versus ...
  2. Manual Trader

    A trader who manually enters trades into a trading system without ...
  3. Forex - FX

    The market in which currencies are traded. The forex market is ...
  4. USD

    In currencies, this is the abbreviation for the U.S. dollar. ...
  5. Quote Currency

    The second currency quoted in a currency pair in forex. In a ...
  6. Currency Pair

    The quotation and pricing structure of the currencies traded ...
Related Articles
  1. A Primer On The Forex Market
    Options & Futures

    A Primer On The Forex Market

  2. Forex Automation Software For Hands-Free ...
    Forex Education

    Forex Automation Software For Hands-Free ...

  3. Getting Started In Foreign Exchange ...
    Forex Education

    Getting Started In Foreign Exchange ...

  4. Getting Started In Forex Options
    Options & Futures

    Getting Started In Forex Options

comments powered by Disqus
Hot Definitions
  1. Effective Annual Interest Rate

    An investment's annual rate of interest when compounding occurs more often than once a year. Calculated as the following: ...
  2. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  3. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
  4. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  5. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
  6. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
Trading Center