When it comes to trading the Forex markets, there are a number of Automatic Forex Trading software tools available to help with anything from generating buy and sell signals to totally automating the entire decision-making and order-placing process. Demo versions of many of these packages can be downloaded from the Internet and tested before being used with real money. We will investigate how these forex trading systems (or “robots”) work, look at some of the most popular forex software packages available and consider the benefits offered by each, so that readers gain a better understanding of what is out there before choosing the most appropriate package.
Forex trading software comes in all shapes and sizes. From simple spreadsheet-based charting tools to multi-million dollar algorithmic trading solutions that employ the latest developments in complex event processing, there is a package to suit every type of trader. We will focus on the lower end of this scale as this website is aimed more towards individual investors and semi-professional traders rather than those sitting on dealing desks at international banks!
There are many places on the Internet where free forex software can be downloaded. Most trading/broking firms who offer access to the markets also offer account holders a dedicated web-based or downloadable software package to trade with, as part of the deal. See our post on Forex Online System Trading for more details of these. But there are also a range of software tools that can be used without having to set up an account with a particular broker. Beware of scams however. There are always some unscrupulous firms or individuals who will try to take your money for a forex trading system that will do nothing except lose you money. The golden rule here is to always make sure you use a demo package to “paper-trade” before parting with any cash.
Forex trading software generally works by giving you a number of configuration options to determine what you want to trade, how you want to trade it and over what time period. You can usually enter some kind of risk profile, your trading outlook (short-term, medium-term or long-term) and what kind of trading strategies or patterns you want to follow (e.g. weighted moving average convergence/divergence). Once you’ve configured everything, you usually are given an option to back-test your parameters to see how successful your trades would have been using historical data. Once you’ve determined the “winning formula”, typically you would then set the system to generate buy and sell signals in the current market using real-time (or near real-time) prices. Then you can dummy-trade for a while before trading with real money. Some systems (particularly those offered by brokers) will automatically enter your trades into the market.
Four of the most popular forex software packages available are Forex Tracer, Forex AutoPilot Turbo, Forex Raptor and Stealth Forex.
- Forex Tracer bills itself as an auto forex trading robot that can be used by anyone, regardless of their experience (or lack of) in the foreign exchange markets. $97, very mixed reviews.
- Forex AutoPilot Turbo (FAPTurbo) is one of the most widely used forex trading applications. It gets better reviews than Forex Tracer but is slightly more expensive at $149.
- Forex Raptor is a fully automated system that gives you the option to trade manually. Recommended by John Chen of TrendForexSystem. $97.
- Stealth Forex includes a range of indicators and instructions on how to find a trend. High focus on intra-day trading, with built in trading safeguards. $199
All of these forex trading systems have the potential to make money, but be warned that trading foreign exchange (whether you use Automatic Forex Trading software or not) is a risky business so never risk more than you can afford to lose.