Algorithmic Trading – Automated Trading System in Forex

Algorithmic Trading:

Nowadays our life is dominated by algorithms in the form of traffic regulating lights, social media news feed, train schedules etc. More than 60 % of trade is actually Algorithm Trading. The algorithms are redesigning the traditional stocks trade as well. The past decade has witnessed noticeable increase in popularity in Algorithm Trading.

The trade of a security applying some specific rules derived from historical information. It is an innovative type of trade that allows a computer program to follow a specific set of rules. This set of instructions includes certain criteria for variables like time of trade, volume and size of order, price etc. After analyzing the variables the computer program ultimately executes a trade on its own. It uses complicated mathematical and statistical formulas for decision making. Obviously it saves you from mental fatigue.

Deep Learning or Artificial Intelligence:

Similarly advancement in Artificial Intelligence has also played a vital role in the ever-increasing popularity of Algorithmic Trading. Deep learning is another huge step in this regard. The process in which computer programmers develop program that can enhance, improve and boost itself. You can make your investment more profitable by paying special attention to deep learning.

Advantages of Algorithmic Trading:

It is mostly used by high profile trading firms. It is particularly profitable and beneficial for large scale orders. Institutional investors also make its extensive use to minimize the trading cost. It is streamlined process and serves for a number of purposes such as to create liquidity or to reduce the trading cost etc. Some prominent and attention grabbing advantages of Algorithmic trading are:

Faster execution of order
Easier trade
Rapidly and efficiently booking profits off minor fluctuations in price
Trade of securities at limited and meager price increments
Error free
Free from disturbing emotions
Less stressful
Less trading cost
Effective and efficient capability and expertise to Backtest
Diversification
Consistency
Discipline in trade
Improves market quality and makes market broader

Disadvantages of Algorithmic Trading:

Although Algorithmic Trading is very beneficial and it has many advantages yet it does not mean that it has no disadvantage. Like all other sources of income and trading systems, it also has a dark side and some disadvantages as well.

Too much dependence on technology
Lack of control of traders
Constant monitoring
Knowledge of programming process(technical skills)
Chances of over-optimization
Needs high- end resources
Lack of consensus results in a lot of regulations
Loses control in extreme fluctuations and irrational market conditions
Precise life span

Thus you need to constantly monitor it so that you may never miss a good opportunity. Like all other trading systems, it also has some pitfalls but hard work in Algorithmic trading ensures huge profit, just like the saying goes “hard work pays off”.

Different Trading Strategies to Trade Euro

Euro:

In Forex market, all the currencies are being traded. However some currencies are traded more frequently. Euro is the second most actively traded currency in Forex market. Euro is the currency of the European Nations. The most liquid pair of currencies being traded on the Forex is EUR/USD. Euro is one half of this pair. Similarly it is also included in the most favored Minor pair of currency being traded in Forex. It is also included in G10 currencies as well. All these facts reflect the strength of Euro. The traders all over the world are trading in Euro.

Strategies:

There are many strategies to earn profit in trade of EUR/USD pair. However there are three strategies that have been proven beneficial and profitable in this regard. You can use them to earn heaps of profit with the trade of this most traded pair. These strategies are risk management techniques. These strategies are:

Pullback:

A brief andtemporary drop in commodities chart in a continuous trend is called Pullback. It is mostly applied and used in case of pricing drops of short term. It is considered as a buying opportunity for the traders after a currency has enjoyed increasing price status. Such a pullback is a positive signal that the rate of the currency is again going to rise. The rate of EUR/USD shuffles greatly in both directions. The pullback strategy is the most applied to maintain demand and supply of EUR/USD pair.

Breakout and Breakdown:

A timely decision is essential for this technique. This pair sets certain ranges for beneficial and profitable trade. Such ranges ultimately fix new trends of trade. Buy the breakout and sell the breakdown is another useful strategy to deal with EUR/USD. You should decide carefully while using this strategy. If you make a deal too early, it will result in reversal. If you wait too longer, it will be a risky investment. Thus it is profitable to minimize the timing risk. You can do it by deciding a partial position in case of break out or break down of the currency pair.

Narrow Range Patterns:

It is another important strategy to deal with the EUR/USD pair. A trading range occurs if a currency is traded between too high or too low rates for a certain duration of time. The top range offers resistance against price increase while the lower range offers support for price. This strategy predicts that EUR/USD’s price bars will increase for breakout or breakdown. The rate of this pair changes and shuffles into prominent barriers and then it stays still, ultimately prints narrow range pricing bars. It reduces risk in the investment.

Powerful Methods to Develop Into a Successful Trader

In case you’ve got a passion for cooking, then you’re going to be excited to experiment with various dishes. Because of this, you might consult with online and offline movies or YouTube cooking stations. While cooking those foods, if something goes wrong, then you may note down it and attempt with various mixes or add in a few of your particular ingredients the next moment. After a couple of attempts, you’ll have the ability to have to make the dish taste suitable for you. This scenario also applies to commerce from stock markets.

You might read things about trading online internet or novels or even look in an online tutorial/course. However, if you don’t do an extensive study about trading and experiment, the same that you may not comprehend the significance of active trading. If you’re an aspiring trader, below are a few methods which it is possible to think about for effective trading.

Keep reading:

Like any other area, to turn into a successful trader, you ought to keep on researching the rules, trading methods, rules, etc.. Additionally, attempt to learn from the errors and possess self-control and be self-indulgent. You ought to be a student to get a successful trader.

Plan your trade and exchange that strategy:

To browse the stormy weather from the marketplace, you need to think about following established principles or strategies. This might allow you to endure and flourish from the stock exchange. Execute a strategy only after ultimately planning your every step of every transaction, as with no suitable strategy. You may wind up getting nothing. So be a fantastic trader who intends a commerce and exchange those strategies.

Constantly be flexible:

The most challenging thing while participating in gambling is that you can not just predict what’s going to occur next in the stock exchange. Thus, as a trader, you ought to have a flexible attitude to the market changes. The bottom rule for any effective trader would be to be more adaptable to almost any circumstance.

Be realistic:

Trading can allow you to reap superior benefits over the years only if you do it correctly for a predetermined period. Know the tips of trading and also be quite keen on each step. Have realistic expectations so you might have a feeling of accomplishment when winning.

Self-control retains the secret:

Money could be emotional for almost all of us, and therefore it may influence us as greed or fear. Being overconfident or rougher on trading may result in over trading and healing digital trading for a game. Keep a calm mind and react to each scenario in the marketplace with a proper strategy.

Examine the Industry daily:

Maintaining a daily log of your commerce after every trading day will be able to assist you in knowing the growth pattern of your transaction as time passes. This will also aid in creating a suitable strategy for commerce.

Be perfect as You exchange:

Many top traders across the globe decide to concentrate on several tried and tested approaches and attempt to execute them flawlessly. They assess themselves how the methods were implemented besides measuring success on arbitrary transactions that may be losers or winners.

Passion, dedication, and persistence

Just people who are enthusiastic about trading could turn into a successful trader. There is little doubt because of this. You ought to have a mindset such as a youngster that has excited about hearing about visiting a playground, about exchanging daily and spend some time on it. One more matter is to be ascertained, don’t take some failures on your heart and possess a powerful will. Learn from your mistakes, and attempt to fix it later on. Always be consistent with becoming a successful trader.

You can’t grasp the art of gambling instantly. On the other hand, the points mentioned above might allow you to develop into a successful trader over some time. Therefore do your home functions and training and get started trading!