Is the current uncertainty in the global equity, bond, forex, and commodities markets good for traders?
Chances are, if you know how to use automated systems and proprietary robot software, you can take advantage of volatile securities markets. Right now, the worldwide economic situation is unique in a number of ways, all of which play into the hands of careful, persistent traders.
Opportunities for Investors and Traders
Four key elements that have appeared in the past few years are worth noting. First, the supply chain crisis that began about one year into the COVID pandemic continues to interfere with logistical routes and wreak havoc on commodity prices. Second, stock prices are still at all-time highs in most developed nations.
The situation can’t last forever, which is why a major correction could be in the cards very soon.
Two other factors that make today’s investing climate a ripe one for attentive investors are the ongoing COVID situation and significant political instability. Keeping an eye on potential military conflicts and civil unrest is an essential part of crafting a workable strategy when operating in forex, equity, and other
asset classes.
Tools of the Trade
What types of trading tools should you employ to stay ahead of the fast-paced price action in your preferred niche? Fortunately, there are several excellent choices, with many newcomers and experienced investing enthusiasts opting for robotic trading. This is particularly true in forex, where account holders often use stand-alone robots or create their own customized programs for executing trades automatically and based on a personalized set of criteria. You can start a forex trading side hustle with greater ease than ever before thanks to these programs.
Manual vs Automated
In general, there are two ways to place orders within a brokerage account. You can either opt for manual or automated trading. Further, there are several variations within the latter framework that range from 100 percent to minimally automated. It’s up to individuals to select the amount of interaction they feel is ideal, based on their preferred risk tolerance, amount of available capital, level of experience, and many other factors. Here are the pertinent details about each strategy, along with some pros and cons you’re likely to encounter should you select a particular approach.
Manual Trading: In the absence of any kind of automation, people make all decisions on their own, enter orders manually, follow positions in real-time, and decide when to sell or exit. Before robotic systems came into widespread use, this was the only way anyone could take part in buying and selling activities. Day traders, as well as those with longer-term horizons, had to physically watch every position unfold, be on the lookout for exit points, and decide when to take action.
Later, brokers began offering minor versions of automation when they gave account holders the power to set stops and specific exit points in advance.
Auto Trading: Auto trading goes under many names, including robo trading, robot assisted- order placement, and others. All names carry some indication that the system requires little or no human input after initiation. You can purchase all-in-one, stand-alone robots from a third party and install them on your brokerage platform.
In order to answer the question what is robot trading, it’s imperative to understand that most of the aggressively marketed products in the niche are not reliable. Many tend to work well for a short time and then lose their effectiveness. Other software is sold by disreputable firms and is only intended to
make a quick profit for the sellers.
However, when trading and investing enthusiasts create their own robotic programs based on platforms like MetaTrader 4, they gain a significant advantage. That’s because they choose their own parameters and criteria for order entry, stop setting, and exit points. Later, based on day-to-day performance, they can tweak the programs according to their preferences, risk tolerance, and changing economic conditions.
When you take part in robot trading, you can set a program to do everything, from deciding on position size to determining precise exit points. Educated, experienced traders usually try out any robotic application in a demo account before putting it into use.
Pros and Cons
Robots are very good at following rules and eliminating emotion. They have other advantages, along with several risks. Here are the basic pros and cons of robo trading products and systems.
Pro: Elimination of human emotion from the decision-making process
Con: Robots blindly follow rules that might become outdated in changing markets
Pro: Systems are simple to download, usually, and easy to implement
Con: Few stand-alone products perform well for more than a few months
Pro: Self-programmed robots, like the Expert Advisors in MetaTrader 4, are adjustable and can be adapted to changing economic conditions and new levels of risk tolerance
