complete guide for forex trading in india
DESCRIPTION
Forex trading is typically done through a broker or market maker. As a forex trader you can choose a currency pair that you expect to change in value and place a trade accordingly. - PowerPoint PPT PresentationTRANSCRIPT
Algorithmic Forex Trading
Algorithmic Forex trading is a logical result of combining
technical analysis with computer programs.
After all, if you always make the same trade under the
same circumstances so why not program the computer to
make the trades? In algorithmic Forex trading the computer follows the price of
one currency pair versus another.
It tracks any data that you want it to track and then makes trades under the
circumstances that you tell it to in the programming. Sounds like it should be
profitable, right? Certainly a lot of big trading houses use algorithmic Forex trading.
Should you? With profit from changes in foreign currency rates as our goal read more
about algorithmic Forex trading.
An Efficient Way to Trade Currencies
To the extent that algorithmic Forex trading always leads to profits it is a great idea. You
can simply pick the Forex pair, select the trading
program, and walk away. If the program is smart enough
perhaps you let it pick the currency pair.
If you tell the program when to start and when to stop and when to get out if there are problems algorithmic Forex trading takes fear and greed out of the picture and could
lead to nice profits.
To the degree that you keep it short and sweet, picking
the most profitable Forex pair and briefly trading it could
result in reliable profits. Now let us look at the dark side of
algorithmic Forex trading.
How Much Information Do You Need to Make a Profit?
One of the reasons that programmed trading is usually limited to large
trading houses is that you need a lot of information about a lot of things to routinely profit from
algorithmic Forex trading.
The business of picking a pair to trade can be simply one of technical analysis or it may require picking information out of the news for analysis.
Analyzing text in many languages takes the level of
difficulty up a couple of notches and puts this out of
the range of the average trader.
How Fast to Do You Have to Process Data to Avoid a
Disaster?
A really fast computer that is well programmed can make decisions and place trades in
tiny fractions of a second. Being in second place in this race to place trades can spell
the difference between success and failure.
Having staff on hand to make changes in computer code
can be invaluable and is not a service that is available to
the average trader. Speed is often of the essence when
reacting to market changes, which is the province of
algorithmic Forex trading.
This puts the average trader at a constant disadvantage if he or she chooses to compete on the basis of reaction time
or data processing ability.
What Are Your Options?
Despite our comments above about coming in second,
technical trading still works but so does sound
fundamental analysis. If you can see a change in the
market coming, you can buy Forex options, puts or calls,
on one currency using another.
This gives you the right to exercise the contract and
make a profit from your good judgment and forget about split second execution or
massive processing of data.