image_pdfimage_print


Forex autotrading is a relatively new concept in the forex markets. This is a system where traders can link their accounts to pre-existing strategies on a broker/independent company’s trading platform, so that trades based on these strategies are automatically executed on the trader’s platform without the need to open and close trades manually. Another name for forex autotrading is mirror trading, because you are essentially copying the strategy to which your account is linked.

This is not to be confused with forex automated trading using expert advisors/forex robots. In autotrading, “successful” traders are invited to list their strategies on the platform of a broker or an independent company (working with a forex broker). These strategies are then listed in an autotrading platform. Traders can then select the strategy that they think will give them profits at the end of the month, and link their accounts to these strategies. Trades will then be executed automatically on the trader’s account based on the selected strategies.

Forex Autotrading: What to Look Out For

There are parameters that a trader needs to look out for before selecting a strategy. The image below illustrates the parameters that are used in judging the performance of listed strategy providers and their track records. Some of these parameters are as follows:

1)      Graph: The graph immediately shows the performance of the listed strategy provider. A trader will want to identify with a provider whose graph shows a linear increase, as opposed to a steep drop before an increase.

2)      Average Pip/Trade: This shows how many trades it takes to deliver a certain number of pips. Obviously, a trader will do well to hook up with a provider that can deliver more pips with less trades.

3)      Drawdown percentage: This is one of the most important forex autotrading demographics that every trader who wishes to participate in forex autotrading must check. A drawdown indicates how far negative a trade will go before it reverses to the trade direction. Most traders have small accounts that cannot tolerate massive drawdowns. From the image below, we can see that one of the listed providers has a drawdown percentage of 36%. This is quite high.

4)      Win %: Obviously, forex is all about winning, so a forex trader will want to link up with a strategy that can deliver a high winning percentage.

There are other parameters, but these are the most important ones.

 

 

In addition, there are other things that a trader should check before selecting an autotrader. Some platforms like that of Zulutrade display a list of the best and worst performing strategies. They also go the extra mile of showing the performance of traders that have followed particular systems, so that an intending user can actually see for himself what he will expect if he signs up with a particular strategy provider.

Finally, intending users have the opportunity to demo trade a strategy to test it thoroughly before signing up with it. This ensures that before a trader signs up with a forex autotrading service, he must have tested it thoroughly and can use the platform confidently.

So if you are looking for a stress-free way of trading forex, try forex autotrading.