There are two types of trading software you can find in Forex. One kind of software is a tool that can help you to better visualize the data no your chart. It can be different indicators or even visual buy and sell signals based on some sophisticated combination of indicators. Another type of trading software is that actually executes the trade instead of a trader. Can those pieces of software make you successful in your trading? This is what I want to discuss in this article.
1. Software as a tool.
Software that shows you buy and sell signals can be very useful. You can base you trading system using those signals. But I don't mean that any tool will make you successful trader. The only thing that made me consistently profitable is my own hard work and continuous learning and applying the knowledge. That's why many new traders who look for software that generate a signal for them can be disappointed after using some of them. The secret is not in the tool. The secret is in the mindset. Tools can help you only so far. But if you have patience and a proper mindset than any tool can help you in your trading.
2. Software as an automated trader.
Another type of software is the one that actually executes trades for you. The most popular one is Expert Advisors you can program yourself if you are familiar with MQL (MetaQuotes language). It seems that you can build a holy grail. Software doesn't have such feelings as fear and greed. It seems it will not be susceptible to trading errors. Unfortunately the seeming strength is actually a weakness. It is interesting to note that successful traders that already trade profitably can take such piece of software and make profit using it consistently. Beginner trader will lose money no matter how good the trading software is.
Sounds like a paradox but it isn't. Experienced trader will use this software as a tool. While a beginner will try to substitute his decision making process with the software. This is the big difference. Most of those Expert Advisors are programmed for certain market conditions. One works better in ranging market another one works better in strongly trending market. Both will lose money if the condition of the market changes.
You need to test your software first and find out what is the market condition it works the best. And all you need to do is to switch this automated trading software on once the conditions are present in the market. Once they disappear you need to switch it off. That's where the experience of recognizing the market behavior and price action comes to play. That's why those who have no understanding of market but wishing to make profit using an automated trading software lose their money.
I don't mean to criticize any trading software. It can be very valuable tool. After all computer software can tremendously simplify our life. My point is that using that software without the study of market is like trying to operate a plane on autopilot without having any knowledge of airplane flight.
Albert Schmidt is a part-time currency trader. After quite a few months of struggle he learned to make consistent profit trading in Forex. Review a trading strategy that he is trading successfully along with the trading software. |
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