Mechanical traders in Forex use an automated system to generate signals to trade.
A set of rules and procedures with a trading strategy is constructed and coded into computer software and programmed to trade as instructed by the trader.
Mechanical Traders in forex choose a system to follow and program it in a way that it can pick setups, set stops and targets for trades.
It can as well as maintain positions without him/her around to control the trade.
The system you choose to use can run trades entirely by itself when well programmed.
It can trade in all market conditions as long as it detects the set rules and can trade for long-term trading or scalping.
Whatever strategy you use personally can apply in mechanical Forex trading system.
When you use mechanical trading system, you are able to trade without your emotions.
Your trading rules will always be followed as programmed with no hesitation because this is a computer trading for you.
Therefore automated system makes trading more disciplined and consistent.
However using mechanical trading has its short comings.
It cannot adjust to any of the new market change.
Mechanical trading is for you if,
- You are not good at controlling your emotions, such as greed, excitement and fear.
- You are too busy to sit in front of the computer all day to analyse charts
- If you are comfortable putting all your profits and capital in the hands of a computer.
- If you are familiar with technology, you love to have a career in programming and coding.
Is Mechanical trading a scam
No, but you can fall in the hands of a scammer.
Most Forex traders have fallen culprit of most scams who sell automated systems on the ground that they were promised a holy grail system.
This is so easy to prove, just try to google “Forex trading” a lot of mechanical trading systems will appear on the first page.
Most of these automated systems are sold to traders and meant to generate strong signals that would make them rich in a single day.
That is an eye catching. After all, it is every trader’s dream to take profit in every single trade.
When it comes to things that deal with money, you need to take precaution always.
Most of them online are just scams and it’s their way to make money from you.
Take your time study, practice and read more Forex books.
This will help you to understand Forex trading and trade for yourself instead of losing all your money in buying something you don’t even know how it works or came about.
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