If you are planning to use Forex trading downloadable software like Forex Raptor, you may already know about many of its benefits, like being able to help you analyze markets within seconds, and helping you place trades automatically to save your precious time. However, you should know that automated trading also has problems which will be highlighted below, along with the best solutions to deal with them.
What Are The Disadvantages of Forex Trading Software?
1. Outdated Information on Currency Strength
Different currencies have different strengths against other pairs and their volatility also differs. Trading software usually take this into account, and will set their profit targets and stop loss levels according this volatility. I have found that older pieces of trading software may store outdated information about the strength of currencies.
For example, the US dollar is not as strong as before. When back-tested, some software will show remarkable results, but end up performing horribly when I put them to the test on demo accounts.
2. Cannot Anticipate Price Movements Caused by News Events
Forex Raptor will not be able to take into account the impact that price events will have on price movement. This problem also occurs to many manual traders who are caught out when sudden news events cause the price to swing wildly.
3. How Do You Deal With These Problems in Forex Raptor?
Luckily, this software is new and does not contain any outdated information on currency pairs. The best way to deal with price fluctuations caused by news events is to remember to place a stop loss limit, no matter how confident you are of the trades. This should protect you from losing a great deal of money if the price moves too much against your positions.