Are automatic forex trading software, also known as “trading robots” worth their price or are they just money in the pocket for developers and foreign exchange institutions? Opinions vary among professional forex traders, but what about your needs? The concept behind automatic trading software is a trader’s dream. Imagine if we found automatic forex trading software that worked in all market conditions. Whether at the beach, on a cruise, sleeping or even working (who would be at that point,) your trading account would be growing. This dream is what keeps trading software buyers chasing every hyped forex software product released. The question remains, are trading robots a fantasy living with unicorns, a secret product only the rich/money grabbing hedge funds can afford, or a reality that is reached for the financially average or even above average trader? The first step would be to define what qualities an automatic forex trading software product would include and analyze the reality of developing it.
Make me a software integrator for a time and here is what I would do. Find the best forex traders; individually explore their strategies, techniques and how they apply them in different volatile market conditions. Next hire a few quantum physics experts to convert each strategy into multiple algorithms. Then develop and apply systematic filtering mechanisms to differentiate market volatility periods. Finally, with the aid of all the experts, crunch the data into software code that matches the right algorithms to any market condition with quantum strength filters. Bingo! A true automatic forex trading software package that literally grows money in trading accounts while we rest next to the pool, clearing our head from the cruise’s previous night’s activities.
Heck yeah! That is the life traders dream of and may soon get. Is it possible? Will the next forex product be the one? Be real, there are two realities known to every successful forex or stock trader. Number one, there will never be a person or software filter that selects algorithm(s) that perfectly execute every trade, but 80-85% or better is reasonable and some pro’s average that regularly. Number two, “News Trumps All,” even pure technical analysis experts will admit that, maybe not publicly, but they get it. And unless you are an illegal insider in every major currency’s financial center it’s not possible to know the news. And if one were so blessed, he or she could not execute it instantly as a computer could. A good automatic trading product could, but is it out yet or will it be coming out in the future?
Many in the trading world admit it is not too far-reaching with today’s technology to develop a good filter set that selects algorithms that calculate and react to market movements. Many believe and is almost factual that an algorithm exists for every market movement. This explains why a few trading software products excel in certain conditions while others fail in the exact market, and vice versa. The truly successful automatic trading robot has filters that select algorithms from its database to apply in that period’s market condition. The dream robot automatically gets you in and out of good trades, out of a bad trades, cutting losses before news spreads as technical analysis does for many traders, but quicker.
Filtering which signals to follow is the tricky part for any human or software product. Quantum physics claim a solution is available for every problem. Has it solved the mystery of automatic trading software? A product is surely in the making and might be the next to hit the forex trading software market.