Most new traders are looking for some kind of trading software to help them in their trading in Forex. There are tow types of software. First I call them auxiliary software. It can be indicators or some sophisticated machine that generates buy and sell signals to trade. Another type is what I call automated traders. This kind of software actually executes the trade on your broker’s platform. Let’s discuss those two kinds of software in more detail.
1. Auxiliary trading software.
This kind of software you are probably most familiar with. The simplest version is and indicator of a price action. Based on those indicators some people build software programs to generate buy and sell signals. This tool simply make the analyzing of price data much more easy. It can be a great tool to simplify your trading but it cannot substitute actual study and analysis of the charts. The most valuable tool in trading is your mindset. If it is in place then any great tool will make your trading even better. If the trading mindset is still missing no tool will make you successful.
2. Automated trader software.
This kind of software is becoming more and more popular lately. It seems like it should be the best way to trade since the machine doesn’t have the human emotions such as greed and fear. So it should not be susceptible to trading errors due to those emotions. What actually happens is quite interesting. When an experienced trader uses the automated trading software he makes profit in a long run. When a trader that has not yet become profitable uses such software he loses money.
Why they get such a different results? The problem with this software is that you can program it to trade profitably only for certain market conditions. Once the conditions change software starts losing money. For example trading software programmed for ranging market will start losing money in a trending market. An experienced trader by testing the software finds out the best conditions to trade with this software and uses it only in that market.
Another trader who has very little understanding of trading strategies and market will try to run the automation software all the time. That will lead him to lose money in Forex. I cannot stress strong enough every software is just a tool in your trading toolbox. It will not make you a successful trader if you don’t have a proper mindset. On the other hand if you already have patience and required trading mindset to test the software then it can serve you as a good tool in your trading.
Forex Trading Software Two Different Types
