Automated Forex trading

Automated Forex trading

Automatic trading on the foreign exchange market can be called the dream of the average man in the street. How to convince numerous advertising links to videos and graphics, they say, enough to have a computer with access to the Network to instantly get money rolling in right in your hand. But it’s not that simple. The programs that are able to trade instead of the trader do exist in huge numbers.

However, automatic Forex trading has its own characteristics applicable to a particular situation. What is the reason for the emergence of such programs, often called advisors or experts?

Problems of a “live” trader

Each, currency trading, inevitably faced with the problems impeding trade and purely human character. It is emotion, excitement; You can just distract close some innocent question at the crucial moment (and the price has already gone!). Therefore, trading using expert advisors has its advantages:

  • perception, processing of multiple information of macroeconomic nature, which the human brain simply does not have time to take into account or process;
  • making an instant decision (within fractions of a second) based on the current market situation;
  • absolute lack of mental and emotional factors inherent in the person and often preventing them from making the correct trading decisions.

What is Forex Advisor

This is “just” a program for automated (fully or not) trading on the currency, stock and other similar markets. The expert Advisor is able to monitor the previous trends and apply them to the current situation. The expert Advisor analyzes the position of various indicators, compares them and independently makes a decision on opening a buy or sell order. Since the expert Advisor is a program, such a product can be both free and very expensive. However, in any case, there are several varieties of such a trading assistant.

Types of experts

Advisor can be standard or written for specific requirements of the customer, which are specified in advance. However, in practice, most often (especially for novice traders seeking to make a profit at once and a lot) use popular models that have already proven themselves well. The owner of such a program can only change some settings in the parameters of the EA, which can belong to one of the following categories:

  • trending: the algorithm is optimized to take profit to the maximum when trading on long positions;
  • scalpers (“scalpers”): they are selling often, but not 3-10 points, mostly opening position with big lot;
  • multi-currency: open trades on many trading instruments (and in some cases simultaneously);
  • according to maringale: when closing a losing trade, the next one is opened with an increased lot. This is one of the most profitable and at the same time risky programs;
  • combined: several algorithms described above are used in “one bottle”. This type of expert advisors is often used for a particular currency pair.

Optimization: why

The main mistake of novice traders, who became known for automatic Forex trading, is that setting the expert Advisor on the chart, they believe — this participation of a person in making a profit is over. Most expert advisors calculate price fluctuations that were previously (on the principle of “history repeats”) and apply it to the current situation. But the market is constantly changing! The fact that the trend of price movement, which operated Advisor yesterday, today may change under other laws. To do this, and serves as a procedure called optimization.