Get Users Vids Top Searched Forex Algorithmic Trading Rules, HOW TO BECOME AN ALGO TRADER IN 3 EASY STEPS.
In today’s video I show you how to become an ALGO TRADER in 3 easy steps. Other terms for ALGO TRADER are often things like ALGORITHMIC TRADER, AUTOMATED TRADER, a TRADING ROBOT or BOT. They are all ways of letting the computer place the trades automatically so you don’t have to.
Becoming an Algorithmic Trader isn’t as difficult or complicated as you might think. By following the steps outlined in this post and video, I believe any trader can become or switch their trading to algorithmic.
Algorithmic Trading to me is simply having a fixed set of trading rules. These rules make up individual or collective trading strategies. You can trade these rules by manually monitoring the charts and placing trades when entry and exit conditions occur.
Better still, with a little bit of programming knowledge you can program the rules into your trading software. This enables you to run the strategy rules on historic price data to see how the strategy “would have” performed had you been trading it in the past. Many softwares allow you to the automate those rules meaning it trades for you as the signals to enter and exit come along.
Algo or Algorithmic Trading has a few different names depending on who you are talking to. It’s also sometimes called “automated trading” or using a “trading robot” or “bot”. Metatrader 4 (MT4) users sometimes call them “Expert Advisors”
The 3 Steps:
STEP 1: STRATEGY & CODE
Firstly you need a trading method or strategy. This is a set of hard rules comprising of at least when to enter and when to exit the trade. Once you have those rules figured out in plain English you can then transfer them into code for your software.
Here’s an example of a rule based trading strategy https://www.youtube.com/watch?v=bPxGP_yZYDw
Personally I use Multicharts as my software choice. But there are many good ones to chose from including Tradestation, Metatrader, Ninja Trader, Ami Broker just to name a few.
STEP 2: LET’S TRADE
You should now be at the stage where you have your strategy programmed and you’ve been able to back test it on some past data. For Forex strategies I like to go back at least 10 years. Once you are happy that the code is working correctly and the strategy performed how you want it, it’s time to turn on automated trading.
With Multicharts it is pretty much as simple as clicking one button to start automation. Make sure you have your position size inputted correctly too. With a connection to the price data and broker, Multicharts can now look for buy and sell conditions and send them to the broker once met.
STEP 3: MONITOR
With any type of trading whether it’s Algorithmic, Discretionary, Scalping or others, you always need to monitor performance.
Trading Algorithms can and do stop working for various reasons. They might work for 10 years or maybe just 10 weeks. It’s your job as the trader to monitor each strategy to make sure it’s still performing well.
Personally I like to monitor each and every individual strategy I have running on a monthly basis.
Video links I mention in this video:
THIS IS WHAT A RULE BASED STRATEGY LOOKS LIKE: https://youtu.be/bPxGP_yZYDw
LEARN HOW TO CODE OR PROGRAM A TRADING STRATEGY: https://youtu.be/SLuz4ogO0p8
LEARN HOW TO CREATE A TRADING ALGORITHM FROM SCRATCH: https://youtu.be/j_UkjbJ48-o
IF YOU HAVE A TRADING STRATEGY IDEA AND WANT TO SAVE TIME TESTING IT, I CAN HELP OUT. FIND OUT MORE HERE: https://www.thetransparenttrader.com/back-testing/
ARE YOU STRUGGLING TO MAKE CONSISTENT PROFITS? WORK ME WITH 1 TO 1: https://www.thetransparenttrader.com/coaching-details-3/
VISIT MY WEBSITE AND BLOG: https://www.thetransparenttrader.com/
DISCLAIMER:
I am not a financial advisor and I am not offering you financial advice. I am not regulated in any way. The purpose of the content I provide is for educational purposes only.
Any information you receive is based on my own knowledge and experience in the financial markets and how you act on the information provided is your own responsibility.
I cannot be held responsible for any losses you may incur as a result of ideas taken from my content provided.
Forex Algorithmic Trading Rules, HOW TO BECOME AN ALGO TRADER IN 3 EASY STEPS.
Why do investors shed money?
While the numbers differ somewhat from study to study, the truth is many investors will shed money as well as it can’t be prevented. All kind of reasons are offered for the losses, consisting of poor finance, bad timing, or a poor technique. … A lot of investors will shed regardless of what techniques they employ.
Recommended Book for Algorithmic Trading
Algorithmic Trading: Winning Strategies and Their Rationale
Book by Ernest P. Chan
Praise for Algorithmic Trading “Algorithmic Trading is an insightful book on quantitative trading written by a seasoned practitioner. What sets this book apart from many others in the space is the emphasis on real examples as opposed to just theory. read more…
Originally Published: 2013
Author: Ernest P. Chan
Advantages of Automated Trading
Algo-trading offers the following advantages:
Trades are carried out at the very best feasible prices.
Trade order positioning is instantaneous as well as precise (there is a high chance of execution at the preferred levels).
Trades are timed appropriately as well as immediately to prevent considerable price modifications.
Decreased transaction costs.
Simultaneous automated look at numerous market problems.
Decreased danger of hands-on mistakes when placing trades.
Algo-trading can be backtested using offered historical as well as real-time data to see if it is a sensible trading technique.
Decreased the possibility of errors by human investors based upon psychological as well as mental factors.
A lot of algo-trading today is high-frequency trading (HFT), which tries to profit from placing a large number of orders at rapid rates throughout numerous markets as well as numerous decision parameters based upon preprogrammed directions.
Algo-trading is made use of in many kinds of trading as well as investment tasks consisting of:
Mid- to lasting capitalists or buy-side companies– pension funds, mutual funds, insurer make use of algo-trading to acquire supplies in big quantities when they do not wish to influence stock prices with discrete, large-volume financial investments.
Temporary investors as well as sell-side participants market manufacturers (such as broker agent houses), speculators, as well as arbitrageurs take advantage of automated profession execution; additionally, algo-trading aids in creating enough liquidity for sellers in the market.
Organized investors fad fans, hedge funds, or pairs investors (a market-neutral trading technique that matches a lengthy placement with a brief placement in a pair of highly correlated instruments such as two supplies, exchange-traded funds (ETFs) or money)– find it a lot more reliable to set their trading regulations as well as allow the program profession immediately.
Automated trading offers an extra methodical method to energetic trading than techniques based upon trader instinct or impulse.
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