The Realm of
Automated Forex Trading System
An automated system is important in Forex trading system.
However, before you can fully comprehend its importance, you have to determine first how large the Forex trading market is. After you have familiarized yourself with the market, you’ll learn a lot about the essence of automated systems. Forex market is the largest market worldwide. It has the largest average daily turnover and revenue per trader. It also yields the largest number of participants.
To know more about the Forex Trading System, you can take a look at the following list:
BANKS. Banks aren’t just for saving money or for entrepreneurs’ capital lending. They are also some of the major players in the Forex market. These banks contribute largely to the daily commercial turnover of the market as well as to speculative trading. Trusted and well-established banks are able to trade several billion dollars’ worth of foreign currencies daily. Most of these transactions are carried by banks on behalf of their clients.
COMMERCIAL COMPANIES. Compared with larger banks, commercial companies trade smaller amounts of foreign currencies. These trades create small and short-term impact on the market rates. Although small, the transactions created by these commercial companies establish great effects in determining the long term projection of a certain currency’s exchange rate.
CENTRAL BANKS. Central banks have control over the flow and supply of the different currencies, inflations and interest rates in the market. They also have the official target rates of the currencies they are holding. Through foreign exchange reserves, central banks are capable of stabilizing the Forex market. Their influence is also enough to make the forex resistant to great changes and fluctuations.
INVESTMENT MANAGEMENT FIRMS. Several traders consult investment management firms to handle their accounts. Most of these firms manage huge accounts including endowments and pension funds of their clients. They use the Forex market to hold transactions pertaining to foreign securities. One good example is an investment manager with an international equity portfolio. He can use the Forex market to purchase and sell several pairs of foreign currencies to pay for foreign securities purchases.
RETAIL FX BROKERS. Retail forex brokers typically handle a freaction of the total volume of the Forex market. One retail Forex broker has an estimated retail volume of around 25 to 50 billion dollars every single day. When calculated, this is assumed to be around 2% of the total volume of the market.
SPECULATORS. Speculators refer to people who observe market trend first. They purchase and sell foreign currencies based on the fluctuations they see on the prices rather than using the traditional methods of interests and dividends. Their role in the market is very important in that they lift off the risks from individuals who do not want such inconveniences.
You can find six different but major role players in the Forex market consisting the $1.8 trillion worth of turnovers daily. With an amount as big as this, it’s really essential that the manual trading system gets replaced with an automated one.
One of the said major role players in the Forex market, the speculators will get the most benefit if an automated trading system is used. Since speculators are more focused with price fluctuations of the various foreign currencies in order to garner bigger profits, the real time analysis of an automated system can provide them the important trades that can take them several steps ahead of the game.
You can find a lot of automated Forex trading systems being used in the market. There are automated systems that are offered as free services. There are also some systems that are parts of trading accounts provided by Forex brokers and agents. These are usually parts of complimentary system packages. If you want to get more features, you can avail them by paying additional fees.
Forex Trading Systems
In general, there are two major types of automated Forex trading system. These include:
Desktop-based system. This type of system stores all of your Forex-related data in your computer’s hard drive. This is typically not preferred by most Forex traders because of the susceptibility of the data from virus contamination and other security threats. If your computer malfunctions, it is highly possible for you to lose all the important information you have stored. Unless you have a back up of these files, they can be impossible to retrieve. This system is also considered to be more expensive than the other types of automated trading system.
Web-based system. Web-based systems are more secured because your web-based provider stores your Forex account details and other essential information on secured servers. Since no software or applications are required, web-based systems are generally convenient to use. There are also universally compatible with any Internet browser.
It is recommended that you use automated Forex trading system even if you are just beginning in the Forex industry. However, if you are feeling reluctant about this system, you can also try other trading systems you like, particularly their demos. It can help you determine which system can help you achieve the goal you’ve set.
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