Traders who work in the forex market understand that achieving consistent results is a difficult proposition. The forex markets are some of the most complex and fast-moving markets in the world, with prices influenced by just about everything that happens across the world. In such markets, making use of intelligent automation can be key to achieving more consistent results.
Anyone who has spent any amount of time trading on the foreign exchange (forex) market knows that it is a harsh environment to trade in. Of all of the different financial markets, the forex market might be the fastest and most unforgiving. The prices of currencies are mercurial at best, constantly shifting and changing based on just about any event that occurs on the planet. Both sole traders and trading firms can struggle to achieve consistent results. By utilizing automation tools intelligently, traders in the forex market can build more reliable trading processes that might net them more consistent results.
The goal for intelligent forex automation tools is not to replace human operators or decision-making, but rather to augment it. The idea is that intelligent automation tools will allow traders to minimize the errors they make, keep to more consistent and structured routines around their trading, and reduce the amount of manual effort they put into making trades. These tools are designed to help traders become more disciplined with their movements in a market as unpredictable as the forex market.
Why is Consistency Important in the Forex Market?
Similar to other financial markets, any long-term trading success needs to be held up by consistent practices. If a trader has a good strategy in mind, but fails to follow it consistently, then they may as well have no strategy whatsoever. Letting a strategy be affected by fatigue, emotion, or an overload of information is all relatively common and can easily cause a trader to depart from their strategy.
When a strategy is applied inconsistently, it becomes difficult to see if it is viable or useful. If you apply a different rule or strategy set for every trade you make, then how will you know which ones that succeed are a result of you following a good strategy, rather than simply luck? Being certain that your strategy works, or doesn’t, is a key component of improving as a trader over time and achieving long-term success. Using intelligent automation tools can keep traders from deviating from the overall strategy, keeping them locked in when they need it most.
What Exactly is Intelligent Automation?
Rather than simple scripts that function on rules, intelligent automation applies machine learning, adaptive logic and data analysis to the problem of trading on the forex market. This can look like making trades automatically, controlling risks, monitoring data, pointing out signal validations and tracking performance over time.
These systems will never react in an impulsive way to market movements; instead, they operate on predefined logic. Using such systems can help traders work in a more structured way, with decisions that are rooted in data, not emotion.
Trade Executions and Order Management on Automatic
There are a variety of uses for automation in forex trading, but by far the most common is automating trade executions. We’re sure you’re familiar; as soon as a specific criteria is met, the tool pulls the trigger and makes the trade in an instant. For markets like forex, where fluctuations can occur very rapidly, these types of automation are very useful.
Another very common way for automation to be used in forex trading is to improve the consistency of order management. This involves take-profit targets, stop-loss levels, and position sizes being calculated automatically based on parameters that you set earlier. The idea is to ensure that every trade fits into your overarching strategy.
Make Emotional Bias a Thing of the Past
We’re all only human, and our emotions can easily sway the way we think. We can get scared and sell earlier than we had planned, or we can get greedy and hold on for too long. Regardless of how your emotions may occasionally rule you, using intelligent automation tools will help to nip those behaviors in the bud and keep you working by the rules you’ve set.
While, of course, you can still make whatever trades you want, using automation tools will encourage you to have a more hands-off approach when the market is especially volatile. It takes a level of bravery and confidence in backing the strategy you set out earlier, but intelligent automation tools make it much easier to remove emotional bias from the equation.
You Are Still in Control
Intelligent automation tools are powerful and can provide some good advantages to traders who use them effectively, but they can’t run your portfolio for you. Markets change, and even the most intelligent automation tool needs to be updated and kept under watch to make sure that it is functioning with the most current information and under the most current iteration of your strategy.
When human operators are pointing the way for intelligent automation tools, allowing them to make calculated automated trade executions and monitor certain aspects of portfolios, this is when these tools are at their best. You want to marry the strategy behind the human operators with the consistency that the intelligent automation tools can provide in a mercurial market.
Final Thoughts
Intelligent automation tools can be a powerful tool, but they are just that, a tool. Human operators who use them to great effect to improve the consistency of their long-term trading plans are more likely to see success from their trading processes. But these tools cannot make decisions for you.
