Types[ edit ] There are two types of automated forex trading which consist of: A completely automated system or known as a robotic forex trading: Generally, this method is what you would classify as a "trading machine" or "black box trading" which executes orders based on certain algorithms based on its creator.
The creator of the automatic trading script has already decided on the aspects of the order such as the timing, price or quantity and initiates the order automatically. Users can only interfere by tweaking the technical parameters such as lot size, risk parameters, stop-losses and take profit of the program; all other control is handed over to the trading script.
How does automated trading work?
An automated system is also unaffected by the psychological swings that human traders are prey to. This is particularly relevant when trading with a mechanical model, which is typically developed on the assumption that all the trade entries flagged will actually be taken in real time trading.
Forex autotrading, as it brings Forex trading to the masses makes even more people susceptible to frauds. Bodies such as the National Futures Association and the U. Securities and Exchange Commission have issued warnings and rules to avoid fraudulent Forex trading behavior.