automated fx trading 234t55

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Traders constantly improve their automatedstrategies: they make changes in theiralgorithms, optimize them, and add new filters;they also buy different trading strategies fromthird-party developers and make a strategiesportfolio; sometimes they rent tradingstrategies from third-party developers and makea portfolio. The notion rent implies not onlymonthly payment for using a trading robot butalso subscription to signals or membership insocial trading networks.

There are certainly many ways for traders toattain their trading goals. But there are threepopular methods advanced and less experiencetraders can use to leverage an automated signalcopier.

USING AN AUTOMATED SYSTEM

DEVELOPED BY A THIRD PARTY

This is the easiest path towards tradeautomation, as it entails copying a tradingsystem created by a third party. This is also apotentially profitable method and it is common

to see many public trading systems consistentlyposting profitable statements. Even then, thecontentious issue with these systems is the lackof certainty that the third party developer hascreated a program that will not constantly loseyou money. This is one of the major reasonswhy many a trader is hesitant to use third partyautomated trading robots.

Ideally, traders should look out for systems thatcome with a clear description of the strategy how it works, whether it trades ranges ortrends, whether the strategy is long term,medium or short term, what the win rate is andwhat risk and reward ratio the system offers.The more information the third party developeroffers, the better the trader will be at choosingan appropriate trading robot.

Of the many trading programs on the market,many are of superior quality, but few areinadequate with scarce benefits and features,especially for the beginning trader. Manyproviders of third party automated signal

New models andmethodologies:

taking your automatedFX trading to the next levelPopularity of automated trading systems has beenconstantly growing throughout the years. On the one hand,the reason of such popularity is that an automated tradingsystem allows a trader to generate more trades (a robotallows to analyze more trading instruments and timeframessimultaneously) and excludes the psychological factor when

making decisions. On the other hand, automated tradingis popularized by brokerage companies and developers oftrading platforms and trading systems.

AUTOMATEDFXTRADING

AUTOMATED FX TRADING

Boris Fesenko

By Boris Fesenko, BJF Trading Group, Inc.


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copiers claim more than a 95percent winning rate. Even then,the most viable programs provide acertified trading history to reveal theeffectiveness of the trading system.However, profitable profit/lossstatements do not guarantee futureresults with any given system.

WORKING WITH AN

ADJUSTABLE TRADING

STRATEGY

This method of automated tradingis more difficult than just copying athird party trading system. Traderswho are looking for a tradingsystem that works efficiently butcan be improved upon will typicallygravitate towards this method.Sometimes, a strategy might havegreat entry logic but a trader mightwant to change stop-limit levelsused in a specific strategy. At othertimes, a trader may also opt tochange the moving average to a

level that they are more at easewith.

A lot of public strategies aret i bl f th b t

functionality, and speed are essentialconsiderations. Intermediate oradvanced traders may prefer asystem that features market specificorders, trailing stops etc. On theother hand, beginner traders mayonly require an easy to use programthat they can just plug in and

play without much input from theoperator.

ESTABLISHING YOUR OWN

AUTOMATED TRADING

SYSTEM

A commendable way to leverageyour own winning strategy is toautomate it so you can apply itaround the clock on all similartrades. Obviously, creating a tradingsystem from scratch is difficult andtime-consuming but if your systemis able to generate profits, then theresources spent will be offset. Agood number of traders often usethe services of a programmer to

create an automated trading systemthat automatically trades for them.

When creating your own automatedt di t it i d bl

to factor in the issue of remoteaccessibility. Traders who travelfrequently should work witha program that permits easyfunctionality and access from anylocation. Web-based systems areideally suited for roaming traders.Virtual Private Server hosting

provides super fast access to theprogram and isolates the tradingsystem for security purposes.

Social trading networks or signalscopiers can be organized withinthe bounds of a single Forex brokeror be multi-broker. Realization ofcopying within the bounds of asingle broker is done on a server-based or manager-based API. Theadvantages of such copying arehigh copying speed and absence ofnecessity to keep a trading platformlaunched. The only shortcoming islimitedness of a system by a singlebroker. Multi-broker copying can be

organized on Forex expert advisorsor scripts.

There are several things to paytt ti t h h i

New models and methodologies

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TRADING


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trading system for copying. As arule, there should be the parameterDuration in any social trading

network. If a trade lasts lesser thanone second or several seconds,its more than likely that problemswill occur during copying. A delaybetween order opening time on amaster-account and a sub-accountdepends on master-broker executiontime, internal delay of a signalscopier and sub-account executiontime. Many scalping strategiescan be destroyed by 100-200msdelay, but even 10-20ms delay issignificant for several systems, forexample, spike-trading systems.

A technology of order interceptionon the stage of sending an order

from a terminal to a master-accountserver (stp add-on) is used in somecopiers for scalping strategiescopying, but even in this case the

lt t t d

ping between our VPS server locatedin Germany and a broker server.Ping average value is 100ms. It

is a significant delay and I wouldrecommend choosing servers nearthe broker server or even serverslocated at the same data center (30-50ms) when working with scalpingstrategies.

The next step was to measure ordersopening delays. There are severalstages between you pressing abutton or an expert advisor sendingan open order command and actualorder opening:

1. A trader or a robot initiatesorder opening on a terminal;

2. An order is transmitted to aserver via internet;3. The server accepts the order;4. The server sends a request

t li idit id i th

We received the following delayvalues:

1. The delay between the stages1 and 2 is almost 0;

2. The delay between the stages2 and 3 is 50ms;

3. The delay between the stages3 and 6 is 40ms. This delaydepends on technologicalsolutions of a broker. Thedelay may be significantlyhigher if there is no cross-connection between aliquidity provider and a brokerserver.

4. The delay between the stages6 and 7 is 50ms.

I.e. the full cycle of order openingon a master-account took 140ms.

When copying an order to a

sub-account of the same brokerwithout interception, the orderwill go through the same 7 stagesand the difference between order

i ti t t


A

UTOMATED

FX

TRADING

Many scalping strategies can be destroyed by 100-200ms delay, but even 10-20ms delay is significant forseveral systems, for example, spike-trading systems.


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the copying process is calculationand adjustment of risk and a lotscaling method on a sub-account. Incase you trade with a fixed lot on amaster-account, everything becomesmuch simpler. In this case, a lotscaling coefficient is often used. I.e.,a lot on a sub-account is calculated

by multiplying a master-accountlot size by a given coefficient. Buta strategy may have a complexmoney management system. In thiscase, use of the scaling coefficientmay lead to violation of the systemideology. There are methods oflot calculation on a sub-accountdepending on master-accountbalance, sub-account balance andlot size on a master-account.

Master Lot Size * (Slave Balance /Master Balance) * Ratio (risk)

THE KEY TO SUCCESS

Preparation to copying may seem

to be a very complex procedure,but the stage of preparation andpreliminary analysis is the key tosuccess. Obvious as it may seem,

f ibl i l i h ld


When creating your ownautomated trading system, it isrecommendable to factor in theissue of remote accessibility.

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Products described in article

www.programmingmt4.com

To schedule a presentation sent a request to:[email protected]

TRADE COPIER

SOCIAL TRADING

Platform

based on EAs

SOCIAL TRADING

Platform

based on manager API

SOCIAL TRADING

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Driving new clients to

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connected via API

Driving new clients to

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Increased via STP add-on

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List of our specialties:

Feel Free to contact us:

[email protected]

MT4 Bridge with dealing functionality

PAMM

MAM

MM

Social Trading Network

Multi-level IB

Price aggregators

Fix connectors

Reporting engine

Trade reconciliation

Risk management platform

Enhanced Dealing

CRM customization and integration

Business process improvements
mailto:[email protected]:[email protected]:[email protected]

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