Traders and investors can turn precise entry, exit and money management rules into automated trading systems that allow computers to execute and monitor the trades. Automated trading software goes by a few different names, such as Expert Advisors (EAs), robotic trading, program trading, automated trading or black box trading. Automated software is a program that runs on a computer and trades for the person running the program. Since it is a program, it will only take trades with parameters that align with what is written in the program. Creating a trading program requires extensive trading knowledge, as well as programming skills.
The first advantage that stands out to me about automated trading software, is simply the nature of having a robot trade for you. It is exact, perfectly disciplined, and doesn't make mistakes (if programmed correctly, of course). One of the biggest problems that a trader faces is his ability to be disciplined and stick to the plan. With automated trading, also known as algorithmic trading, you can be assured the robot will be completely disciplined and stick the trading plan you set up. Often times, it is the ability to stick to the plan that makes the difference between a profitable trader and an unprofitable trader.
While manual trading still has its place, the future belongs to automated trading. However, a good robot manager aka 'Robot Trader' is the key to having to correct balance between a trader and a machine. This is not about Human VS Robot but rather Human + Robot. Both have a very important role to play. Good automated software is needed to take advantage of automated trading. Moving onto auto trading is natural progression each trader will need to recognize if he is to succeed in this new world of trading.
Programmers consider many components synthesize while they are developing an automated trading system or EA robot, including Nature of Market, Math Modeling, Time Frame, Entry and Exit Signals, Stop Loss Trigger, and Profit Target, etc. After the system is created, they do backtesting and forward testing rigorously both in a demo and live accounts. A fully automatic trading system created like this way is able to analyze the market independently, work completely on its own and constantly generate signals, auto-execute in a trading platform.
No doubt, computers will typically beat human beings in the speed of identifying a trading signal and the entry and execution of the corresponding orders. Automated trading is not perfect yet, and EA robots cannot think instead of humans. If the programmer's skills are at a low level, or the strategy idea is untenable or non-logical, the corresponding product will not succeed. However, the practical experience shows that a high quality automated trading system always guarantees some kind of financial success for its owner working on the forex market.