What is Forex Automatic Trading?

In a world where artificial intelligence is becoming a distinct possibility so are multiple attempts to introduce algorithms into Forex trading creating Forex automatic trading. What is Forex automatic trading today? First of all it is in the formative stages. Despite what we see in the movies there is not yet a super intelligence capable of out thinking experienced traders in all ways. However, it is possible to program a Forex strategy into a computer. Then the computer will be able to identify specific patterns and execute trades much more rapidly than a trader can. To the extent that speed of execution matters, so will automatic trading. To the extent that a preformed and possibly rigid strategy works so will automatic trading. What is Forex automatic trading? It is a means of executing a preformed Forex strategy rapidly. What is Forex automatic trading? It is giving the decision making of Forex trading over to a machine. How to trade Forex successfully includes learning from one’s mistakes. As computers learn from unsuccessful trades they become more successful.

There are a number of programs available that offer Forex automatic trading. Some tout the fact that a person or panel reviews trading results and continually modifies and, hopefully, improves the program. Some programs tout the ability of the computer and its program to learn from unsuccessful trades. To the degree that a computer can do this successfully it approaches artificial intelligence. However, no one is saying that they have a computer and program that is running on its own, without human programming help, and continually improving its trading success. As far as results go what is Forex automatic trading compared to human trading? That is hard to say. A common claim in advertising for automated programs is that Forex trading is random and that the best anyone can hope for is 50% success. Then the ads go on to say that even getting to 60% trading success allows the trader to make money. The final claim in ads touting automatic trading is that these programs can beat 50% success and, in fact, run at 70% to 90% successful trades. So, is this how to trade Forex successfully?

A wise man once said, in another era, that there is no problem in life that cannot be solved by sitting down and figuring with paper and pencil. That sort of approach is necessary in evaluating success claims in automatic Forex trading. For example, it is conceivable that an automated program scalps profits all day long but makes less money that the trader will pay in commissions. Ignoring the “overhead” of trading is an easy way to claim success for any approach to trading foreign exchange. To the extent that a program waits until a situation is absolutely clear before executing a trade it may approach 100% success in profitable trade execution. However, by waiting until the last minute the machine may well be foregoing the most profitable trades. Anyone who is going to buy one of these programs needs to know just how much profit is included in a 70% + successful system and if, indeed, the profit surpasses the overhead sufficiently to pay for the investment in the software. A pertinent question in this regard is what is Forex automatic trading when the Forex market is trading sideways, as it commonly does? Is it a money maker? If so, for whom?