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Automated Trading |
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When the garden variety trader first learns of the Foreign Exchange Market, they think that the daily volume and profit potential means that huge financial success is just a hop skip and a pip away.
But the truth of the matter is that the Forex Market is trading 6 days a week, 24 hours per day, and dominated by multinational corporate treasuries, massive investment funds, and national banking and economic agencies. The daily price swings means that there is a great deal of risk for the individual investor. However, there are ways to reduce the risk and take advantage of the huge opportunity the market offers.
Most individual traders find themselves overwhelmed not long after their first few trades, largely due to the emotional desire to jump back in after a loss or gain, the mishandling of leverage, and the total lack of money management techniques, not to mention physical and mental fatigue.
In order to thrive in the forex market, a trader must build a trading system free of the stress of trading, and then display the discipline to trade it exactly as it was intended. For the vast majority of individual traders, that means using automation.
Every automated trading platform should have the following:
Signals: These are the events that trigger market entry and exit. The platform should have sufficient customizability of signals to meet the system's trading needs.
Systems: Signals are combined in a script for trade entry, trade management, and trade exit.
Test Trading: This allows completely formed systems to be tested historically using tic data, and then on a forward-looking basis using a live market price feed.
Live Trading: Tested engines are graduated to live trading status, where a trustworthy forex dealer executes trades in a real money account.
Ideally, the best automated platform would provide the following services:
1. Exact execution of a trader's system.
2. Allow the trader to work in a test environment with the exact same set of tools that will be used live.
3. Allow the trader to build systems, test them, and implement them live in such a way that the trader knows that the live system will execute trades exactly as the test system did, and similar performance should result.
4. Free the trader of the majority of physical & emotional demands associated with forex trading.
5. Make money!
Note: Be aware that most platforms usually reveal one or more flaws. It's up to the individual trader to decide if they can live with those flaws or not. If you are unhappy with a platform, do not feel that you are obligated to use it.
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| Symbol |
Rate |
| GBP:CHF |
2.007608 |
| GBP:JPY |
182.222212 |
| GBP:USD |
1.757198 |
| NZD:USD |
0.658397 |
| EUR:CAD |
1.503413 |
| EUR:CHF |
1.557680 |
| EUR:GBP |
0.775889 |
| EUR:JPY |
141.384148 |
| EUR:USD |
1.363390 |
| AUD:JPY |
80.415028 |
| AUD:USD |
0.775455 |
| USD:CAD |
1.102702 |
| USD:CHF |
1.142505 |
| USD:JPY |
103.700427 |
| USD:SEK |
7.185028 |
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History
