The Ultimate Way to Trade on Forex

The simplest way to trade forex is to set the stipulations for trading then let transactions proceed automatically. Rather than being glued to your computer screen all day long, your trading system should free you to have a real life yet still earn profits on your trades. There are lots of different approaches to reach this goal; in each, your initial decisions will highly influence the success or failure of your trading program.

Trade by Robot

A forex robot is real-time trading software that continuously monitors market conditions and places trading orders when conditions match the profile you have programmed into the robot. Your trading profile is based on upon some technical indicators. These indicators trigger trades when critical values are reached. For instance, a momentum oscillator is an indicator which will trigger a trade when prices reach a calculated level. By carefully programming a forex software, you can let the robot sweat the details as you concentrate on the real picture.

Managed Accounts

A forex managed account is one in which you turn over the trading duties to an experienced professional. Your task is to carefully screen candidates for the job based upon their previous experience, their use of trading techniques that you understand and approve, and references from satisfied customers. You determine the parameters for the account manager’s activity. For example, you select how much leverage (borrowing) to use – the less collateral you pledge, the higher the portfolio leverage and the more risk/reward potential. A conservative portfolio may use two to five times leverage, whereas an aggressive portfolio may feature a 40:1 leverage ratio – you pledge a dollar of collateral for each $40 you borrow to invest in your portfolio. Your account manager constantly monitors the currency market, while your task is to monitor your account manager’s performance.

Auto-Trading

Auto-trading is a novel concept pioneered by companies like Zulu Trade. In an auto traded account, you choose from a menu of professional traders. Your account is then structured to mirror the activity of your chosen trader. The trader isn’t aware of your account – the auto-trading broker handles the linkage between the trader’s portfolio and your own. Whatever trades your trader makes for his own account will also be executed in yours, adjusted for the relative size difference between the two accounts. Once more, your job is to diligently research the candidate traders before you tie your portfolio to his or hers.