Automatic Trading

Author: XEN
Filed Under Expert Advisors |

My opinion on automatic trading is: “The most amazing subject on the planet earth”.

What is Automatic Trading ? The name mostly speaks for it’s self !

Automatic Trading is a form of trading a strategy without actually being at the computer, without doing the precious analyse every time you want to trade. Automatic trading refers to AI (artificial intelligence), well actually it’s not a virtual brain, it’s a trading algorithm based on your trading strategy and analysis.

Automatic Trading can be described with 3 simple words “virtual”, “trading”, “algorithm”. A trading algorithm can be coded in any software programming language as well as c#, c++, Visual Basic and other. But today… anyone can create automatic trading systems in Scripting Languages like MQL4.

They use functions that create, modify, delete trades; functions that do the precious technical analysis in seconds that you would normally do manually in minutes or hours; and other system specific functions. Some use more than 300 functions. But most of the time, simple is better… more conditions mean less trades and less trades mean less income.

Automatic Trading tests are also very useful to perfect your manual trading strategy. Testing various ideas on wide time-frames can give you a good overview on how it would work on manual trading.

Automatic trading systems also have no emotions, that’s probably one of the most important “features”.  Also, one of the disadvantages is that automatic trading systems are vulnerable to paradigm changes. And most of the strategies only work best a couple of years.

I personally don’t know what to say about “automatic trading systems not working after a 1-2 years”, it’s not even close to the truth. If back-testing works for 5 years, then it most likely won’t go wrong in the next 5 years.

Comments