Automated Forex Trading: Systems, Tools & Risks

Automated trading is a solution that saves you time, refines your trading strategies, and lets you trade faster and at any hour without watching the markets or placing orders yourself. Automated forex trading also greatly reduces the influence of emotions in trading decisions and follows your trading plan or strategy exactly and continuously, because it is a software program or a trading robot that does the work in place of the trader. Before you get started in this trading activity, though, this guide covers everything you need to know about automated trading, along with the best brokers, robots and software for automated forex trading.

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What Is Automated Trading?

Automated trading is a trading technique that consists of partially or fully automating the entries into and exits from your positions on the financial markets. With automated trading, every buy and sell operation is carried out by a program. It remains essential, however, for the trader to define the parameters of the trading strategy after careful technical analysis.

What Is Automated Trading Software?

Trading software is a computer program that places orders automatically, based on the various trend signals of the financial markets. This trading tool, also called a trading robot, carries out transactions in place of the trader. Trading software relies on technical analysis of the market to make its decisions.

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What Are the Types of Automated Trading?

Fully automated trading: the trading software has total autonomy over the trader’s investment. It is the program that decides to open and close positions, calculates the risk/reward ratio, sizes the positions, and so on. Once the trader has configured the program, they are completely hands-off.
Assisted or semi-automated trading: once the trading robot has analyzed the markets according to the parameters set by the trader, it sends alerts, and the trader can then choose whether or not to place an order. Assisted or semi-automated trading can also mean software that simply manages positions the trader has opened themselves.

Which Assets Can You Trade Automatically?

Currencies (minor, major or exotic)
Stocks
Indices
Contracts
ETFs
Commodities
Cryptocurrencies

Who Can Use Automated Trading?

Automated trading suits beginner traders just as much as intermediate and professional traders. Since using trading software requires no particular expertise, even novices can put it to work. Professionals most often use it to test their strategies. Independent traders, and even financial institutions that own trading robots, can also do automated trading.

What Are the Automated Trading Strategies?

The third-party strategy: the trader uses third-party software connected to their trading account on a platform of their choice. Success with this approach depends heavily on the performance of the program used.
The high-frequency strategy: the goal here is to use automation to execute a large number of orders in very little time. Its defining features are reliance on technical analysis and short position holding periods.
The trend-following strategy: you set a time interval that becomes the reference for the trading software. Over this predefined period, the software analyzes the financial markets and, based on the results, manages the positions.

What Are the Best Forex Automation Tools?

MetaTrader 4 – available at Vantage FX –: the MT4 platform gives traders a personalized trading experience. They can build their own algorithms for trading in France, as well as their own indicators. Depending on the parameters each trader has predefined, it can find opportunities by importing Expert Advisors. This platform, available at many brokers, lets retail traders trade a wide range of financial instruments.
MetaTrader 5 – available on Vantage FX –: this platform stands out above all for its versatility. Like MT4, which it succeeds, MT5 lets you buy and sell a wide range of financial assets. At several brokers, this platform supports automated trading.
ZuluTrade – available at the broker Vantage FX –: as social trading and copy trading software, ZuluTrade gives inexperienced traders the chance to copy the trading strategies of professional traders, so they can reach an automated trading level. Thanks to its « The Automator » feature, ZuluTrade can alert the user by email when an event occurs, or automatically execute actions.
DupliTrade – available at the broker Vantage FX –: DupliTrade is compatible with several regulated brokers, including Vantage FX. The goal of this software is to give its users a high-quality mirror trading experience by automating transactions with excellent signals.

Which Brokers and Platforms Are Best for Automated Forex Trading?

VT Markets – Best Broker with Signals & High Leverage
Vantage FX – Best Broker for Automated Forex and CFD Trading
AvaTrade – Many Excellent Automated Trading Solutions
XM – Best Automated Trading Broker for High Leverage
Bitcoin Era – Excellent Automated Cryptocurrency Trading Robot

VT Markets: Best Broker for Automated Forex and CFD Trading

VT Markets shines through its complete offering for automated trading. This regulated broker gives its traders 3 options: copy trading via its VTrade platform, the ability to join a PAM/MAM account (a managed account that replicates the lead trader’s portfolio) and trading signals. What stands out in particular is how simple it is to choose reliable providers, plus the transparency of the performance records.

Advantages of Automated Trading with VT Markets

Easy-to-use platform
Deposit bonuses to boost your capital
Excellent order execution quality
Wide choice of signal providers
Low trading fees, to maximize performance
Regulated, serious broker to keep your capital safe
Mobile app to track your performance wherever you are
Free withdrawals of your gains by bank transfer
Combine the loyalty program with your trading performance

Disadvantages of Automated Trading with VT Markets

So many traders to copy that it can sometimes destabilize some users

Vantage FX: Best Broker for Automated Forex and CFD Trading

Vantage FX offers a satisfying automated and social trading lineup. The broker indeed works with partner platforms that make automated trading possible. Its traders can above all count on one of the best forex copy trading services, AutoTrade. More than 90,000 people use this online trade-copying platform — an excellent opportunity for anyone who wants to automatically copy the brightest traders. In addition to this platform dedicated to the forex robot and automated forex trading, Vantage FX also offers the MetaTrader 4, MetaTrader 5, ZuluTrade and DupliTrade platforms for automated trading.

Advantages of Automated Trading with Vantage FX

Ergonomic, practical site
Excellent execution quality
Wide range of financial products
Best forex broker for automated currency and CFD trading
Site that is 100% secure
Large number of automated trading platforms
Native mobile trading app available on iOS and Android
Great many deposit and withdrawal methods

Disadvantages of Automated Trading with Vantage FX

Updating problems that can cause losses
No technical support for French-speaking traders

AvaTrade: Many Excellent Automated Trading Solutions

AvaTrade lets its users trade automatically across a variety of financial markets from several platforms (and even a trading app) available on PC and mobile (Android and iOS). DupliTrade, ZuluTrade, Avasocial, MetaTrader 4 and MetaTrader 5 are the main ones; they are 100% free with AvaTrade and offer many options, including programming trading robots, backtesting, automatic copying of strategies and trading signals, and the exact replication of experienced traders’ trades.

Advantages of Automated Trading with AvaTrade

Simple platform to use
No trading experience required
Fast, easy account opening
Varied range of automated trading software
Wide range of assets to trade automatically
Varied payment methods
Easy withdrawals
Multilingual, attentive customer service
Robot trading broker regulated by several bodies
Broad selection of educational tools

Disadvantages of Automated Trading with AvaTrade

Very long account approval time
Inactivity fees
Limited research tools

XM: Best Automated Trading Broker for High Leverage

XM is a broker regulated by three financial authorities. It offers its clients more than 1,300 financial instruments to trade in manual mode, and others in automated mode. Its financial assets can be traded on XM MT4 and MT5 for PC and Mac, or on various mobile devices. Failing that, the trader can trade automatically with XM WebTrader, accessible from any browser. In total, XM offers around 16 platforms to choose from to its millions of users. With XM’s MT4 in particular, the trader can benefit from a wealth of resources and tools to carry out transactions in automated fashion (trading signals, Expert Advisors, etc.).

Advantages of Automated Trading with XM

Recognized automated trading broker
Available in more than 30 languages
Low trading fees
Secure payment methods
Broker accessible to everyone
Top-quality service
Excellent Forex and CFD trading offering
Many automated trading platforms
Leverage of up to 1:888
Bonuses of up to $5,000
Attractive training offering
Negative balance protection

Disadvantages of Automated Trading with XM

High inactivity fees
No cryptocurrencies

Bitcoin Era: Excellent Automated Cryptocurrency Trading Robot

Bitcoin Era is a trading robot for Bitcoin and other cryptocurrencies. Although manual trading is also possible on it, its automated trading mode is particularly popular with beginner traders who want to trade the cryptocurrencies on offer with ease. The Bitcoin Era automated trading software is well designed and sophisticated. It analyzes the financial markets in real time using its artificial intelligence and algorithms, so that traders can automatically take positions on assets in a way that maximizes gains or minimizes losses.

Advantages of the Bitcoin Era Trading Robot

Ease of use
High (claimed) success rate
Live automated trading
Fast withdrawals
Available 24/7
Excellent security measures
Fast transactions
Competitive fees
Customer service available

Disadvantages of Automated Trading with Bitcoin Era

Probable overstatement of the success rate and the daily earnings
Risk of capital loss always present

Advantages of Automated Trading

Time savings: using automated trading software means a program analyzes the markets while you get on with something else.
Protection from emotions: even the most experienced traders often let fear, anxiety and other emotions cloud their trading decisions. An automated trading system has none of that subjectivity.
Discipline maintained: automating transactions preserves that discipline which some traders do not always have, especially when they let their emotions take the wheel.
Faster order placement: automated trading considerably improves the speed at which a trade is entered and exited.
Backtesting possible: with an auto trading system, the experienced trader can test a trading strategy more easily, checking whether it works and how profitable it can be.
Trading at any hour possible: with automated trading you can trade 24/7. This system gives access to many financial markets and offers many trading opportunities.
Low costs: since an auto trading bot can carry out a large number of transactions in a short space of time, transaction fees are relatively low when you trade automatically (you make more transactions, so logically the broker or the robot operator reduces your fees, unlike manually placing one or a few trades a day).

Disadvantages of Automated Trading

Malfunction risks: automated trading needs an internet connection, for example, to run. An outage, whether natural or human in origin, can occur and lead to a loss of capital.
Monitoring obligation: even if the stock trading automation software can execute orders on its own, it is important to monitor whether the results produced are the ones you want.
Lack of transparency: the algorithms on which automated trading software bases its decisions are not always accessible to the person using it.
Inability to improvise: in a crisis or a crash, or when market conditions make it impossible to execute an order, an auto trading system cannot improvise.
Programming differences: the gap between the theoretical trades resulting from the strategy and the actual trades can be significant. Hence the point of starting with small trades, or paper trading them first.
Scam risk: the automated trading market is infiltrated by fake software. Hence the importance of scrutinizing it carefully before getting started. Prefer reliable, world-renowned operators such as Vantage FX, for example.
Vulnerability to hacking: given that it is a computer program, an automated trading system can be hacked. So pay real attention to the security measures put in place by the platform you choose.

Tips for Getting Started with Automated Trading

Choose your platform well: it is better to go for a regulated, reliable automated trading site that offers auto trading options which are interesting and advantageous for the trader. The automated trading platforms offered by Vantage FX are arguably the best on the market. Simply create an account on Vantage FX to start using them free of charge for your auto trades.
Look into mathematical risk management models: find books that deal with mathematical risk management models, get reading, then try to implement what you have learned in your automated trading strategies.
Set your trading schedule carefully: the trading schedule plays a leading role in an auto trading strategy, mainly as far as risk management is concerned. The longer the period, the greater the risk.
Check position holding times: this means precisely controlling the best periods for trading, the time needed to hold your positions, and so on.
Practice with a demo account: a demo account helps you buy and sell financial instruments in real market conditions without risking your capital. It lets you practice automated trading before moving on to the serious stuff with a live account. Vantage FX, moreover, offers an unlimited demo account with a virtual balance of your choice and access to the MetaTrader 4 and MetaTrader 5 platforms (among others), which support automated trading and strategy testing.

Why Trade Automatically?

Eliminating emotions and other subjective elements from your trading strategy;
Getting more reliable analyses by taking advantage of the speed and computing power of algorithms;
Being present on the financial markets at all times, whatever the hour;
Having more free time, since it is not always necessary to watch your positions;
Being able to execute more than one order at a time — which is not always possible with manual trading, the very heart of the forex bots vs manual comparison;
Implementing scalping strategies efficiently on the currency markets (Forex), on cryptocurrencies and on CFDs in general;
Maximizing your chances of winning thanks to the various opportunities the software is able to find.

What Are the Characteristics of Automated Trading?

No emotionality: the trader’s emotional side is completely absent from auto trading software.
Flexibility: it is easy to adapt your trading strategy to your schedule, instead of staying glued to watching your positions or placing orders all the time.
A varied offering of opportunities: thanks to its many indicators, automated trading software can easily find new opportunities and analyze market trends faster and more effectively, so as to take positions on the trader’s behalf or — as with semi-automated trading software — send signals to the trader, who will then decide whether or not to take a position.
Execution of multiple orders at once: unlike manual mode, automated trading offers the advantage of executing several orders at the same time.

How to Choose Automated Trading Software

Check its accessibility: automated trading software should be usable on various devices (PC and mobile: Android and iOS), or at least on the device you want to use to trade automatically.
Consider the financial instruments available: an auto trading platform must give access to a variety of financial markets. It should let you trade various financial instruments, or at least the ones you want to trade automatically: Forex, Cryptocurrencies, Commodities, CFDs, etc.
Examine the tools on offer: whether analysis tools and/or decision-making tools, the automated trading software should offer a large number of them. It must have effective tools through which the trader can make better investments.
Look at the number of users and their reviews: a large community of users of an automated trading platform is proof of its performance, as are positive reviews of it.
Check the accepted trading strategies: you must be able to implement the strategies of your choice: scalping, day trading, hedging, etc.
Consider the required starting capital: to open an account on an algorithmic forex trading platform, a certain budget may prove necessary, and it can vary from one platform to another.
Take into account the educational tools provided: training content can be useful, particularly for beginner traders. It makes the software easier to pick up and helps you keep learning about trading.
Don’t forget to check its reliability: auto trading software must be reliable, secure and tied to a regulated, recognized broker, as is the case with the MetaTrader 4 and MetaTrader 5 software available at Vantage FX.

Ouvrir un compte chez Vantage →

How to Do Automated Trading for Free

Program and develop your own trading strategy, in order to create an Expert Advisor you have complete control over; or else use a free Expert Advisor offered by the auto trading software;
Download free automated trading software online and test it on a demo account;
Use the Expert Advisors and custom indicators of the Switzerland trading, Morocco trading or France trading platform to trade automatically and free of charge.
It can also be simpler to just create a trading account on Vantage FX, for example, download automated trading software (MT4, MT5, DupliTrade, etc.) from your Vantage FX account, log into the software with the credentials Vantage FX provides once account creation is finalized, use the free Expert Advisors (or other free auto trading solutions) available on the software, and start automated trading for free.

How to Do Paid Automated Trading

Open an account with a broker offering automated trading platforms — notably the broker Vantage FX;
Download automated trading software (MT4, MT5, DupliTrade, etc.) from the broker’s site and create your account there;
Choose a paid auto trading option from the software: a paid trading algorithm, a paid MT4 or MT5 Expert Advisor, etc.
Configure and launch the paid automated trading option or algorithm you have acquired.
You can also find and pay a coder / developer to create an auto trading algorithm for you, an algorithm you will then use to trade automatically.

Why Should You Optimize Your Automated Trading Software?

Making sure it complies with changing market conditions;
Getting new results with different parameters without changing your strategy;
Being able to trade a new financial asset;
Multiplying your chances of winning and increasing your returns;
Improving your money management (fund management, risk management).

How to Optimize an Automated Trading Expert Advisor on MetaTrader 4

Choose the MT4 Expert Advisor to optimize
Take exactly the EA you want to improve
Choose the stock symbol you want to trade
Determine the operating duration of the Expert Advisor
Specify the duration of the automated trading system optimization
Define the spread the Expert Advisor should use to simulate past trading positions
Launch the optimization.

How to Optimize an Automated Trading Expert Advisor on MetaTrader 5

Choose the MT5 Expert Advisor you want to optimize
Specify the time unit
Enter the test dates
Indicate the execution type
Specify the amount of capital for the test
Determine the type of test to run
Choose the optimization type
Define the advanced optimization parameters (maximum balance, maximum balance + profit factor, etc.)
Launch the Expert Advisor optimization on MetaTrader 5.

How to Attach an Automated Trading Expert Advisor to a Chart in MetaTrader

Access the navigator by clicking the shortcut at the top left of the MetaTrader terminal
Go to the « Expert Advisors » section
Choose your trading algorithm (your Expert Advisor) and attach it to the MT4 or MT5 chart of the price of the asset you want to trade: simply click on the Expert Advisor (EA) of your choice, hold the click and drag what is selected to drop it onto the chart (click-and-drag).
The EA will be attached to the chart and a configuration window for it will appear automatically.
Configure the EA in the window that opens (types of positions to take, alerts, etc.) and don’t forget to tick the « Allow Live Trading » box in the General section. This lets the software trade automatically 100% according to your parameters. Otherwise (if you don’t tick this box), the EA will merely send you alerts / signals, without taking any positions.
Click « OK » to mark the end of the EA configuration.
Finally, click the « Expert Advisors » button (or « Auto Trading », depending on your MT interface language) in the MetaTrader menu bar (the second bar above the chart). It is this click that actually activates the Expert Advisor, which can then begin trading automatically. Either way, to know whether it is activated, simply look at the top right-hand corner of the price chart: if the emoticon there is smiling, then the EA is activated; if not, it is not activated, and you must click « Expert Advisors » (or « Auto Trading », depending on your MT interface language) in the top menu bar to activate it.

How to Build an Automated Trading System

Learn the computer programming language
Define the position opening and closing conditions of your strategy from a starting idea
Choose the type of instruments you want to test (test before trading after the test) in your strategy
Set yourself money/risk management rules (leverage, stop loss, position size, etc.)
Turn your starting idea into a trading system through simplified creation or through programming
Test your trading system to check its effectiveness
Run your trading system in live mode (this is no longer a test)
Monitor and optimize the parameters of your trading system to make it more efficient.

What Are the Essential Elements of an Automated Trading Strategy?

Real-time analysis of the stock price trend
An automated buy signal and an automated sell signal
An automatic take profit and an automatic stop loss
The win/loss ratio

Automated Trading Example

Example of automated currency trading (Forex) with the EUR/USD pair on MT5
Open the EUR/USD asset chart
Open the « Navigator » window and double-click on

This article is intended for educational purposes and does not constitute investment advice. The investments mentioned carry a risk of losing your capital.