Best Automated Trading Strategies For Forex

September 11, 2021

10 min read

Automated trading is a process of using different types of programs for trading purposes. There are many different types of software created for trading automation. For some of them are used for analytical purposes only, there also are others that can be used for actual trading purposes.

Among the most important things for successful automated trading is finding the best automated trading strategy for Forex trading according to your personal needs and wants in the trading market.

When you are using Forex trading robots, you are letting the program do all the hard work for you. Without the trading robots, the process of analyzing the price movements in the market could take hours, if not more.

On the other hand, when going with trading robots, everything happens in a much more effective and efficient way. The trading bots are able to analyze huge amounts of data in a matter of minutes, which is a huge help for Forex traders all around the world.

While there are many trading strategies available for those using trading robots, not every single one of them is equally effective and good. Many professionals have tested and tried different types of strategies, and there are some that are better than the others.

As a trader, it is very important to first understand your needs in the Forex trading market before you decide which strategy you want to use. One of the best things to do to pick a strategy is to do backtesting and see how the strategy works in different types of market conditions.

Below, we will talk about the best strategies for automated trading. So, follow our guide and find the best automated Forex trading strategy for you.

Arbitrage Trading Strategy

Arbitrage in the Forex trading market is one of the low-risk trading strategies that is used by many retail traders to make a profit with no open trading positions. The main idea behind the strategy is to use the price inefficiencies in the market across different Forex brokers.

This type of trading strategy involves the process of buying and selling different currency pairs not because of their massive price movements but because of the price inefficiencies across the market.

By using this strategy, you are basically buying a certain currency for a lower price with one broker and sell it with another. The main idea behind it is to find companies with different prices for currencies. When you do so, you are earning profits because of the different prices on different brokerages.

While it is a very low-risk strategy, it is not easy at all. It takes a lot of time for traders who use this strategy to find the best opportunities for their trading endeavors. Because of this, in many cases, traders are required to use different types of trading robots and other programs to make sure that are not missing out on major opportunities in the market.

In fact, many view Forex arbitrage as one of the best algorithmic trading strategies for Forex as it needs huge support from robots for the best outcome. By using Forex robots, you will be able to find the best opportunities in the market a lot easier than you would be able to do on your own.

Trend-based Trading Strategy

When it comes to the best automated Forex trading strategies, one that is used the most in the market is the trend-based strategy. It is a very popular way of trading currency pairs. By following the general trends in the market, traders are able to make profits even from the slightest changes in the market.

However, trend-based strategies are quite hard to execute on your own as there is a great deal of information that should be analyzed for this strategy to be successful. In most cases, trend-based strategies are supported by technical analysis.

For this, the best thing to do is to use technical indicators, however, it can get very hard to follow so many changes in a shorter time for retail traders when they are analyzing on their own. On the other hand, there are many robots available in the market that can help traders in their technical analysis.

Because of this, many view trend-based strategies as the best automated trading strategy. Identifying general trends in the market might be a bit of a challenge for traders, especially for beginners. For these traders, using trading robots seems to be a great idea.

Once you understand what general market trends are, you will be able to plan your positions a lot better. What’s more, you will also be able to tell when the trend reversal might happen, which can create a lot of profitable opportunities in the market.

Also, once you have identified the trends in the market, came up with a trading plan, and set the settings of your trading robot, the robot will be able to follow the instructions very carefully. This way, you can be sure that there are no emotions involved in the trading and everything is done according to your plan.

News Trading With Autotraders

When talking about Forex trading strategy automation, many people think of the technical side of trading first. However, a great thing about modern trading robots is that they can be used to analyze not only the technical side of the market but the fundamental side as well.

Trading according to the news in the market can be a hard yet rewarding task. There are many things that influence the price movements in the Forex trading market, one of the most impactful being the ongoing events around the world.

For example, whenever a certain central bank around the world changes its policy, it can have a huge impact on the price of its currency. The new releases about the performance of a certain country’s economy can also have an impact on the currency trading market.

Keeping up to date with these events can be quite hard on your own. News Forex automated strategy can provide those who are using fundamental analysis additional tools to analyze the market and plan their positions according to the ongoing events in the market.

Many people around the world are using special Forex calendars to make sure that they are following the ongoing changes in the market. This way, they are always able to be ready for the specific events that can be influential for the Forex trading market.

Choosing the best Forex automated strategy is not easy as there are many things that the final decision will depend on. However, as a trader, one thing that can help you to understand what your personal needs in the markets are. This way, you should be able to make better, well-informed decisions.

We have generated over 900% in 2022 mostly thanks to news trading. The year has shown a lot of volatility, usually a fruitful ground for news trading and automation.

HFT Trading / Scalping

Both HFT, short for High-Frequency Trading, and scalping are short-term Forex trading strategies that are very popular among Forex traders. While very rewarding, both strategies are very demanding and require a lot of attention from traders.

It is not a surprise that many tend to avoid these strategies because of how demanding they can be. However, there are a lot more people who are using them every day. When you are using scalping or HFT as your trading strategy of choice, you are very likely to open and close numerous positions throughout the day.

These positions mostly tend to be very small. However, because there are so many of them being opened throughout the day, scalpers are still able to make high profits. Because there are so many positions that you are opening during the day, you will need to do a lot of research and market analysis.

This can be very hard to do on your own, which is why there are so many scalpers and HFT traders who are using Forex robots. For many, scalping is the trading strategy for Forex automation because of how much it truly needs some sort of assistance.

In most cases, those using such short-term trading strategies are using robots to analyze the market very fast. In addition, many traders are also setting their own robot preferences to match their trading style the best.

The trading robots are able to display what they have to offer the best with strategies such as scalping and HFT.

However, at the end of the day, there are numerous Forex algorithmic trading strategies that can be used by traders. You can choose any of them depending on your personal needs and preferences.

FAQ on The Best Autotrading Strategies for Forex

Which strategy is best for automated forex trading?

The best Forex trading automation strategy is a short-term strategy, where you can use every benefit that the automation trading has to offer very successfully. Some of the best strategies to use with trading robots are scalping and HFT. These two trading strategies are used very frequently by those who are looking for the best Forex automated trading strategy. However, there are many others available in the market and you can easily find one that fits your needs the best.

Can I automate my trading strategy?

Of course, you can automate a trading strategy in the Forex trading market. Almost any strategy can be automated as long as you have the necessary tools for it. Majority of the Forex trading robots that are available in the market work with almost any trading strategy. Thanks to this, you can easily trade Forex by taking advantage of everything that modern technology has to offer. Reach us out if you need help building your Expert Advisor, as well as testing exiting EAs.