currency trading taxation

The Relationship Between Automated Forex Trading Systems And Trading Decisions
By Mike De Long
Trading has always being a Do-It-Myself kind of affair.


You decide
1. Which trading strategy to use
2. How many kinds of strategies to use
3. When do I decide my strategy is not working
4. What price to buy
5. What price to sell or cut loss
6. What price to add on positions
7. How much money do I use per trade
8. How many different currencies you want to trade
9. What time to trade and not to trade
10. How much drawdown before trading is ceased
11. and many other decisions!

1. Too many decisions contribute emotions and thus poor trading

Looking at the list of decisions a trader has to made, you probably understand how a simple buy and sell game can be so difficult.

A trader could probably prepare a trading plan that lists down all the correct decisions to make. However, in the midst of the trading war I call it, powerful emotions start to sway the traders from making the right decisions.

His decisions would tend to sway towards keeping or making more money, no longer would he make the correct decision in his trading plan like cutting losses short.

This is also the very reasons why most inexperienced traders are unable to stay long in the market before their account is being wiped out.
They know the correct decision to make but once their money are in their trade, they lose their focus on making the right decisions.

2. Filling up human weakness

Automated Forex Trading Systems were thus introduced to fill up the human weakness.
They are programmed exactly on "What to Do" regarding the decisions above.

They do not have emotions and simply follow your instructions on entering or exiting trades.

3. Trading instructions into scripts that broker software use

Automated forex trading systems are basically scripts that broker software is able to use. The broker software comes in two versions, the desktop and web-based version. The most common forex trading software is MetaTrader 4 (desktop version).

All trades are entered and exit based on the instructions in this script.
The trades will be executed live once the system is online. It would execute 24 hours day without the need for any users' intervention.

In short, he is executing trades like a trader would without the unnecessary emotions.
The correct Automated Forex System can greatly leverage your trading curve and wealth. However you need to choose the correct software and system.