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. Currency Trading Software

    Trading software to help the currency trader with forex trading ...
  4. Authorized Forex Dealer

    Any type of financial institution that has received authorization ...
  5. USD

    In currencies, this is the abbreviation for the U.S. dollar. ...
  6. Forex - FX

    The market in which currencies are traded. The forex market is ...
RELATED FAQS
  1. How many types of markets can an investor choose from?

    There are a wide variety of markets in which one can invest money. The main markets are stocks (equity), bonds, forex, derivatives ... Read Full Answer >>
  2. How do I Implement a Forex Strategy when spotting a Sanku (Three Gaps) Pattern?

    A forex trading strategy can easily be implemented to profit from a market reversal signal that comes from the sanku, or ... Read Full Answer >>
  3. How can I profit from monitoring open interest?

    Since markets experience asymmetric information between parties, monitor whether there is an imbalance between the open interest ... Read Full Answer >>
  4. How is liquidity risk captured by the cash conversion cycle (CCC)?

    Liquidity risk is captured by the cash conversion cycle (CCC) through the use of days inventory outstanding, days sales outstanding ... Read Full Answer >>
  5. What's a good forex strategy to use when spotting a Wedge-shaped Pattern?

    Use wedge-shaped patterns to identify bullish or bearish price action when trading currencies in the foreign exchange (forex) ... Read Full Answer >>
  6. How do I perform a financial analysis using Excel?

    Investors can use Excel to run technical calculations or produce fundamental accounting ratios. Corporations use Excel to ... Read Full Answer >>
Related Articles
  1. Options & Futures

    A Primer On The Forex Market

    Moving from equities to currencies requires you to adjust how you interpret quotes, margin, spreads and rollovers.
  2. Forex Education

    Forex Automation Software For Hands-Free Trading

    Automated forex trading software scans the market for favorable trades based on your input. Find out more about this valuable forex tool.
  3. Forex Education

    Getting Started In Foreign Exchange Futures

    Learn how these futures are used for hedging and speculating, and how they are different from traditional futures.
  4. Options & Futures

    Getting Started In Forex Options

    Stocks are not the only securities underlying options. Learn how to use FOREX options for profit and hedging.
  5. Forex Education

    Commodity Prices And Currency Movements

    Find out which currencies are most affected by fluctuations in gold and oil prices, and improve your trading.
  6. Forex Education

    Top 7 Questions About Currency Trading Answered

    Whether you're puzzled by pips or curious about carry trades, your queries are answered here.
  7. Options & Futures

    Getting Started In Forex

    Before entering this market, you should define what you need from your broker and from your strategy.
  8. Chart Advisor

    ChartAdvisor for May 29 2015

    Weekly technical summary of the major U.S. indexes.
  9. Trading Strategies

    Pros & Cons Of Day Trading Vs Swing Trading

    Day trading involves making dozens of trades in a single day, based on technical analysis and sophisticated charting systems. Swing trading is based on identifying swings in stocks, commodities, ...
  10. Charts & Patterns

    The 6 Most Profitable Grocery Stores

    These are the six largest grocery store chains operating in the United States.

You May Also Like

Hot Definitions
  1. Mixed Economic System

    An economic system that features characteristics of both capitalism and socialism.
  2. Net Worth

    The amount by which assets exceed liabilities. Net worth is a concept applicable to individuals and businesses as a key measure ...
  3. Stop-Loss Order

    An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit ...
  4. Covered Call

    An options strategy whereby an investor holds a long position in an asset and writes (sells) call options on that same asset ...
  5. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
  6. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
Trading Center