Just how important is an automated system to the your Forex trading? Before answering that question, let us first determine how large Forex market is. From there, we will realize the need for automated systems especially for those who just started out and do not like doing everything themselves or trusting brokers for their every trade.
While it is true that Forex is the largest market in the world in terms of daily turnover and revenue, it is also where most people trade as the capital layout is much lower than other investments.
Before I elaborated on the automated trading systems, let us examine 5 big players of Forex and all other investments.
1. Banks
Banks are not just for us to deposit and save our money but also for providing financial and investment services.
Though we all know these, not many actually know they played a pivotal role in Forex as well. However the fact is that they do cater both speculative trading and daily commercial turnover.
Well-established banks trade in billions of dollars worth of foreign currencies everyday. Some trades are undertaken on their clients' behalf while others are done through proprietary desks.
2. Commerical Companies
Compared to banks, most commercial companies trade smaller quantities of foreign currencies. Hence their trades produce small and short-term impact on the market rates.
However, the trade flows from transactions made by commercial companies are essential factors with regards to the long-term direction in regards to the exchange rate of a certain currency like US Dollars or British Pounds.
3. Investment Management Firms
These firms generally manage large accounts on behalf of their clients such as endowment policies and pension funds.
Other than those, they are also using the Forex market to facilitate transactions specifically in foreign securities. For example, an investment manager bearing an international equity portfolio needs to purchase and sell several pairs of foreign currencies to pay for foreign securities purchases.
4. Retail FX Brokers
Like commercial companies, retail FX brokers handle small quantities of Forex investments.
Yet their sales volume is estimated to be around 25 to 50 billion dollars a day. That works out to about 2 per cent of total market volume.
5. Speculators
These refer to individuals who buy and sell foreign currencies.
As opposed to popular methods such as interest and dividends, they still profit from market fluctuations.
With the rise of internet and technology, there is really a need in switching from manual to automated Forex trading systems.
They certainly prove a huge advantage and eliminate all the inconveniences and problems people face in in traditional trading. Since they focus on the price fluctuations of what they trade to profit, the real time data analysis the system provides help them tremendously in determining which trades give them the most advantage.
There are various automated Forex trading systems available in the market. Some are offered for free trial while others are offered as part of their trading account acquired from their Forex brokers or agents.
Such system packages are generally elementary trading systems. But if you want more benefits, you need to invest more.
There are essentially 2 types of automated Forex trading systems which are:
1. Downloadable Software
The first is the downloadable software. Through it, all forex data are stored on your PC hard drive.
Unfortunately, this is unpopular with most traders because all data are vulnerable to virus contamination and other security problems.
Worse still, when the computer malfunctions, all essential information might be lost and cannot be retrieved unless you have your own backup files like thumb-or-hard drives.
2. Web-Based Application
At first glance, this looks like a site but is protected by user name and password.
They are hosted on secured servers and much more convenient in that downloading is not necessary. Best of all, most are compatible with both Windows and Apple Mac.
Best of all, they provide trading demos for you to try before deciding which system suits you best in terms of personality and preference.
While it is true that Forex is the largest market in the world in terms of daily turnover and revenue, it is also where most people trade as the capital layout is much lower than other investments.
Before I elaborated on the automated trading systems, let us examine 5 big players of Forex and all other investments.
1. Banks
Banks are not just for us to deposit and save our money but also for providing financial and investment services.
Though we all know these, not many actually know they played a pivotal role in Forex as well. However the fact is that they do cater both speculative trading and daily commercial turnover.
Well-established banks trade in billions of dollars worth of foreign currencies everyday. Some trades are undertaken on their clients' behalf while others are done through proprietary desks.
2. Commerical Companies
Compared to banks, most commercial companies trade smaller quantities of foreign currencies. Hence their trades produce small and short-term impact on the market rates.
However, the trade flows from transactions made by commercial companies are essential factors with regards to the long-term direction in regards to the exchange rate of a certain currency like US Dollars or British Pounds.
3. Investment Management Firms
These firms generally manage large accounts on behalf of their clients such as endowment policies and pension funds.
Other than those, they are also using the Forex market to facilitate transactions specifically in foreign securities. For example, an investment manager bearing an international equity portfolio needs to purchase and sell several pairs of foreign currencies to pay for foreign securities purchases.
4. Retail FX Brokers
Like commercial companies, retail FX brokers handle small quantities of Forex investments.
Yet their sales volume is estimated to be around 25 to 50 billion dollars a day. That works out to about 2 per cent of total market volume.
5. Speculators
These refer to individuals who buy and sell foreign currencies.
As opposed to popular methods such as interest and dividends, they still profit from market fluctuations.
With the rise of internet and technology, there is really a need in switching from manual to automated Forex trading systems.
They certainly prove a huge advantage and eliminate all the inconveniences and problems people face in in traditional trading. Since they focus on the price fluctuations of what they trade to profit, the real time data analysis the system provides help them tremendously in determining which trades give them the most advantage.
There are various automated Forex trading systems available in the market. Some are offered for free trial while others are offered as part of their trading account acquired from their Forex brokers or agents.
Such system packages are generally elementary trading systems. But if you want more benefits, you need to invest more.
There are essentially 2 types of automated Forex trading systems which are:
1. Downloadable Software
The first is the downloadable software. Through it, all forex data are stored on your PC hard drive.
Unfortunately, this is unpopular with most traders because all data are vulnerable to virus contamination and other security problems.
Worse still, when the computer malfunctions, all essential information might be lost and cannot be retrieved unless you have your own backup files like thumb-or-hard drives.
2. Web-Based Application
At first glance, this looks like a site but is protected by user name and password.
They are hosted on secured servers and much more convenient in that downloading is not necessary. Best of all, most are compatible with both Windows and Apple Mac.
Best of all, they provide trading demos for you to try before deciding which system suits you best in terms of personality and preference.
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