When something is automated, especially by machine, it’s taking over what used to be done by a human being. Think about those automated phone systems you run across almost on a daily basis. Yes, they can be difficult to use, but not if you give it the correct input. If you push the right button, you get your results much faster and you get the right information when you need it the most.
With this automated Forex trading, if you input the correct insight-your knowledge of the Forex, then the work is automatically done for you by the program. How does this automated Forex trading work?
When you have automated Forex trading, you have a program set up on a computer that will respond to the various degrees of technical information you feed it. The technical information that the automated Forex trading program is given depends on the depth of knowledge the trader has.
You can’t teach what you don’t know and if you don’t know how to use technical information (referred to as analysis), then your automated Forex trading program will be just wasted space on your computer.
The Forex trader makes a technical analysis when he or she studies the Forex market to determine the market’s history and the potential of the Forex to perform in a similar manner in the future.
Technical analysis involves looking at the past to what currency sold, when it sold and how much it sold to decide how to buy or sell a currency pair now. All of this is information the trader has to be aware of if the automated Forex trading program is to work as it’s designed to work.
History itself also plays a part in the type of information the trader should know to input into the automated Forex trading program. Remember those wild clothes from back in the seventies and eighties?
Some of those same styles and pattern designs are sold in stores today. Why? Because history tends to come full circle. It’s this realization that makes using an automated Forex trading program a smart move.
The automated program can pick up on that history repeating trend and trade in the same manner. What the automated Forex trading program can do with the technical analysis you give it, is to see the history (a trend in Forex) and know which way to go based on the history.