Autotrading is common in the currency trading. Many hedge funds and other entities that manage money through forex trading use some form of autotrading in their daily activities.

Previously these autotrading programs also known as Expert Advisors or Forex Robots were expensive costing like thousands of dollars and only wealthy individuals or big institutions like hedge funds could afford them.

However, the recent advancement in computer programming has made it possible for professional forex traders to team up with a software expert to develop their own autotrading systems. Many private individual traders have also begun to adopt autotrading to execute their thoroughly backtested and highly optimized forex trading strategies.

The recent advancement in computer programming has made these Expert Advisors cheap. The price of these Expert Advisors has come down to around a few hundreds that can be easily purchased by ordinary investors like you and me. Metatrader platform makes it real easy to program such type of Expert Advisors.

So what is autotrading? You must have heard or read a lot about the benefits or advantages of autotrading. Recent advancements in computer programming has led to the development of trading platforms that allow an API ( Application Programming Interface) which connects the trader’s system to the dealer’s trade execution structure through the trading platform.

The trading system needs to be ruled based and mechanical in nature with clear cut entry and exit rules. Once all of the trading rules and criteria are determined by the trader, programming an API can be relatively straight forward for anyone with programming experience. APIs requires programming skills on the part of either the trader or a programmer hired by the trader. After the specific trading rules and criteria are determined, the trading strategy is backtested with positive results.

The development of an autotrading system depends more on your trading skills as compared to your programming skills. When this occurs not only trades entered when predetermined technical criteria is met but trade exits in the form of stop loss and take profit rules can also be programmed into the API. Autotrading is almost as simple as flipping a switch to begin the trading process.

However, an autotrading system should be thoroughly backtested and forward tested to make sure the likely success of the autotrading system before being put on live trading. This creates an entirely self contained autotrading system. So autotrading can actually execute real trades on current real time market prices. When a predetermined signal emerges, the software actually places a trade automatically.

Any nondiscretionary technical trading strategy that has clear cut, unambiguous rules is a good candidate for autotrading. In fact, if the trader has optimized and perfected this type of black and white trading strategy that runs devoid of human judgment, autotrading is perhaps the best way to achieve it. Autotrading effectively eliminates all human biases, errors and emotions in the trading process.

There are a number of successful autotrading systems now available in the market for the ordinary retail investors. The best two are FAPT and Ivy Bot.

Mr. Ahmad Hassam is a Harvard University Graduate. Try This Cash Printing Forex Signal Service From Heaven! First practice on your Forex Demo Account! Grab a totally unique version of this article from the Uber Article Directory