The techniques used by a forex trader to determine whether to buy or sell a currency pair at any given time have a common name “Trading Strategy”. Forex trading strategies can be based on technical analysis, or fundamental, news-based events. The trader’s currency trading strategy is usually made up of trading signals that trigger buy or sell decisions. Forex trading strategies are available on the internet or can be developed by traders themselves. The main goal is to generate profit from the purchase and sale of currency pairs in the financial market.
Basics of a Forex Trading Strategy
Forex trading strategies can be either manual or automated methods for generating trading signals. Manual systems involve a trader sitting in front of a computer screen, looking for trading signals and interpreting whether to buy or sell. Very boring situation with a high risk of failures. Automated systems are used by smarter and successful traders. They involve algorithms that find trading signals and executes trades on its own. The algo systems take human emotion out of the equation and improve performance. In order to work as expected, algorithmic software should be placed on the best forex vps! This guaranteed a proper environment for algorithmic trading.
Why do I need an Automated Trading System?
There is a long list of advantages to have own “algorithmic software” monitor the markets for trading opportunities and execute the trades, including:
System minimize emotions throughout the trading process. By keeping emotions in check, traders typically have more time sticking to the plan. Since trade orders are executed automatically once the trade rules have been met, emotional fluctuations don’t reflect the trading, defined by common sense. In addition, it’s helping the new traders, who afraid to “pull the trigger”. The robot can curb those who are apt to overtrade – buying and selling at every perceived opportunity.
Trade rules are established and trade execution is performed automatically. Discipline is preserved even in volatile markets. Discipline is often lost due to emotional factors such as fear of taking a loss, or the desire to eke out a little more profit from a trade. The expert advisor helps ensure that discipline is maintained because the trading plan will be followed exactly. In addition, “pilot error” is minimized; for instance, an order to buy 100 bucks will not be incorrectly entered as an order to sell 1,000 bucks and etc.
Improve Entry Speed
Installed on forexvps, the trading bot will respond immediately to the changing of market conditions. The system able to generate orders as soon as trade criteria are met. As soon as a position is entered, all other orders are automatically generated, including protective stop losses and profit targets. Getting in or out of a trade a few milliseconds earlier can make a big difference in the trade’s outcome. That’s why we strongly recommend NextPointHost servers! The NextPointHost is the only certified provider, where the algo system can be used! Usage on the local computer will not give the desired results!
One of the biggest challenges is to plan the trading. Even if a trading plan has the potential to be profitable, traders who sometimes ignore the rules don’t archive the expected results. There is no such thing as a trading plan that wins 100% of the time – losses are a part of the game. But losses can cause psychological traumas. So a trader who has two or three losing trades in a row might decide to skip the next trade. If this next trade would have been a winner, the trader has already destroyed the profit. The Automated Trading Strategy allows traders to achieve consistency by trading strictly following plan.
An automated trading system permits the user to trade with multiple accounts or various strategies at one time. This has the potential to spread risk over various instruments while creating a hedge against losing positions. Human can’t accomplish efficiently such tasks executing manual orders by a computer. On the other hand trading bot installed on ultra-low latency Forex VPS, able to scan for trading opportunities across a range of markets, generate orders and monitor multiple trades for less than a few milliseconds.
Ability for Backtesting
Backtesting applies trading rules to historical market data to determine the viability of the idea. All rules need to be absolute, with no place for interpretation. The computer can not make guesses! You must teach it, what exactly to do. Traders can take precise sets of rules, created by Yue Wang or to create own rules. Then they can test the presets on historical data before risking money in live trading. Careful made backtest allows traders to evaluate and fine-tune a trading idea and to determine the expected results – i.e., the average amount that a trader can expect to win (or lose) per unit of risk. Mr. Wang offers some tips on this process that can help refine your current trading strategies in Backtesting. See more at the specially created article “Backtesting results of Aggressive Trend Scalper”.
Deployment of Algorithmic Trading System
Many forex traders start with good trading strategies. Ideologically are owners of automated money-making machines. The reality often is different. These ultimate systems can not achieve the expected and promised levels of profit. Even at worst-case situations trade robots generate huge loses. Reason is the improper placement of the software on a local computer. Small, but important fact, unknown to beginners. The key to success is the usage of specialized and optimized environment where expert advisors can work 24/7 without interruptions. The name of this environment is “forex vps” and initially has been developed by NextPointHost. In our days have several other providers who try to abuse the term. Their services are pale copies of the original NextPoinHost’s product. We strongly recommend to avoid them. Use only original product.
Recommended setup for The Best Results
The only certified server environment where the expert advisor (EA) will achieve the best results is Next Point Host forex vps with low latency connection to robust broker and AlwaysUP® Protection of MetaTrader terminal. This is the location where for years many profitable robots work non-stop 24 hours a day, 7 days a week. Main reasons professionals to prefer that provider instead to trade on their own computer directly are:
- Reduced Slippage — The NextPointHost’s service has 10 000 times lower latency compared to 3/4G GSM Networks.
- 99.9999% Uptime Guarantee — services are 100% reliable, but in order to be quite honest, there may occurs very rare emergency situations with a few seconds of interruption.
- Never Reboot Protection® — Unique service guaranteeing a stable environment for your award-winning trading strategy.
- AlwaysUP® Protection — Secret technology, developed by the strongest hosting provider for protection of MetaTrader terminal.
- Access to the trading robot anywhere from any kind of device.
- 24/7 Technical support.
We hope the article gave you a good overview of what is “Automated Trading Strategy” and how it works? It’s designed to help forex traders, entrepreneurs, investors and freelancers to increase profits. In case you have any additional questions, feel free to submit them as comments to us. In case that article helped you to answer some of your questions or help you to earn money, Share it inside all social networks! Share it inside the forums. Share it into websites. Let all people know, how valuable the article is! That simple step will help us to provide you more useful articles in the future.