Tag Archives: algo trading

Why to Consider Automatic Trading Strategy Generation

The use of automatic trading strategy is a “big business” not only for the retail traders but also for financial institutions Due to increasing processing power, fast network connection speeds and new upcoming technologies like ‘machine learning’, automatic trading becomes more and more lucrative. But what does it mean for a retail trader?

Could an Automatic Trading Strategy be Profitable

You probably already have heard about EA’s or so called Forex robots. Those are automated strategies that are coded by a programmer and run automatically on a Forex trading platform. However the sad truth is that only 1% of all Forex robots are actually making money. This is because most automatic trading strategies are designed and optimized only for a specified time period. You buy a robot today and it stops working within two months. Then, a new set of strategy rules or re-optimization is needed to make the system profitable again. This takes time, efforts, and is very costly. Most of retail traders will just buy a robot, discover that it doesn’t work and go and look for another shiny piece of software. After few tries they will probably say: automatic trading does not work and it’s one big lie. But is it?

What is the Next Big Thing in Automated Trading?

The new upcoming technology is the automatic trading strategy generation. Automatic strategy generation technique makes possible to design, test, and optimize thousands of different strategies in a “split” of a second. (Actually it will take some time but it is 10000 times faster then manual programming and testing). Using special tools designed for automatic trading strategy generation anyone without any programming knowledge can produce and test thousands of original trading strategies in a day. It is possible to test, optimize and select only the strategies that are making profit in current market conditions. This would never be possible with manual EA programming and testing.

What Are the Advantages of Auto-Trading

The biggest advantage is time-saving. The new strategies can be automatically generated and tested 24/7. In few days you can test millions of strategies and select only the best ones. The second advantage of automatic strategy generation is the fact that it really works. There are many examples of profitable strategies that are designed and generated not by humans but by computers. The last big advantage is that this is very new technology and there are many new things to discover. The era of automatically generated trading strategies has just begun.

If you want to learn more about auto-trading and auto strategy generation read here about it: Auto-trading blog

Written by: coensio.com

3 Best Automated Forex Trading Systems that Work

Auto Forex trading is getting more and more popular with the time. Every Forex auto trader is working harder and harder to improve his automated Forex trading strategies. But have you ever wondered which are the best automated Forex trading systems? If yes, then you have landed on the right page. Today we will name three automated trading systems and strategies that work. But first, let’s do some basic rehearsals.

Why Engage in Forex Trading?

Foreign exchange trading and other financial market activities are becoming increasingly popular. Some people are doing it for a living e.g. brokers and professional traders.  Others consider it as a way to earn passive income or to gradually build up long-term investments. Still, there are others who get into it for the thrill and experience of online trading.

Who Can Trade?

Fast-paced technological advancements allow trading to continuously widen its doors and accommodate all sorts of traders. Corporate entities and individuals, regardless of financial status or location, can engage in the trading business. With either huge amounts of resources and investments or with just modest money on hand, anyone can trade from anywhere around the world.

What is Automated Forex Trading System?

Automated Forex trading systems involve trading where separate trades are executed based on computer algorithms. Automated trading uses computers and highly advanced online Forex trading software in monitoring trading opportunities and executing the transactions.



There are many ways to participate in the trading business. You can opt to use any of the auto trading solutions that have evolved in the market. The three best automated trading systems known are Algorithmic Trading, Copy Trading, and Mirror Trading so let’s go through each of these three auto trading approaches.

1)    Algorithmic Trading

Algorithmic Trading System

In case you wonder what is algorithmic trading, we have an explanation for you. The algorithmic trading meaning involves a lot of mathematical calculations. In algo trading, automated trading algorithms or instructions are entered as input by the programmer and analyst. Once certain conditions are met or satisfied and the limits set are reached, trading plans and strategies can be formulated.  Based on the trading plans, the computer automatically generates the automated Forex trading signals either to buy or sell.

To learn algorithmic trading systems you should also approach expert advisors (EAs) or auto trading bots. This is special automated trading software that every algorithmic trading system develops and makes use of, and can work 24/7. Such performance cannot be duplicated by humans without committing errors due to fatigue and other factors. Most of the algos used include parameters on volume or quantity, percentage, price, and timing of the trade. These indicators are highly critical to institutional traders. Thus, this type of trading is favorable to corporate traders. It can execute large trade orders in real time.

However, the computer being a machine means that it needs to be constantly monitored, as it can be subject to mechanical failure at any time due to power and connection problems.  As a pre-programmed device, it is also prone to programming and encryption errors that can cause large losses, if left undetected.

2)    Copy Trading

Copy Trading System

Copy Forex trading is the next Forex auto trading system that we will discuss. Copy trading is best for newbie traders who have not yet gained adequate knowledge and skills in the business. You are probably still wondering how does copy trading work. Here is a simple answer:

There are automated Forex trading platforms such as Zulu Trader where you can join and copy Forex trading strategies of the expert traders. In other words, your copy trade profit depends on the decision taken by the expert trader you follow.

This trading system is also known as social trading, as you can participate in a special Forex social network and communicate with other traders through the exchange of messages and ideas, as well as through access to live feeds and post, like, share and comment functions.

3)    Mirror Trading

Mirror Trading System

Another automated trading system that was introduced in the late 2000s is mirror trading. If you are new in trading, you can start as a mirror trader. You can do mirror trade by mimicking the trading strategies of successful traders.

Start by analyzing the trading pattern or behavior of the traders you want to replicate. Once you have decided on the strategies to adopt, then these are entered into your account, and you can then begin your mirror trading system. This can be set to auto trading in which case the computer executes the order automatically once the signal provider opens a position.



If you want to have more control on your account, you can set your mirror trading Forex system to semi-auto mode. Once the trading signals are generated, you can manually execute the trade.

Do Automated Trading Systems Work

Now that you know what is automated trading, you are probably asking yourself “Do automated trading systems work?”  They sure do. But first:

  • You should choose the best automated Forex trading system for you. You should learn how it works and how it applies to automated trading platforms.
  • You should plan, build, and code a successful automated trading Forex strategy that you want to systematize.
  • You should examine the automated trading services of your Forex auto trading software in details to minimize possible errors in trade implementation and strategy building.

Conclusion

In summary, you can decide to trade high or low.  You may also prefer automated over manual trading.  But be wise. Remember not to be swayed into using untested auto trading solutions, especially if they promise incredible profits. Choose a legitimate automated trading platform that has been adequately tested. Once you are comfortable and have access to appropriate trading strategies and tools, trading can be an interesting, rewarding, and satisfying venture.


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