Discussion of article "How to Make a Trading Robot in No Time"
Forum on trading, automated trading systems and testing trading strategies
newdigital, 2014.02.15 06:58
Trader Styles and Flavors (based on dailyfx article)
Technical vs. Fundamental
Technical analysis is the art of studying past price behavior and
attempting to anticipate price moves in the future. These are traders
that focus solely on price charts and often times incorporate indicators
and tools to assist them. They look at price action, support and
resistance levels, and chart patterns to create trading strategies that
hopefully will turn a profit.
Fundamental analysis looks at the underlying economic conditions
of each currency. Traders will turn to the Economic Calendar and Central
Bank Announcements. They attempt to predict where price might be headed
based on interest rates, jobless claims, treasury yields and more. This
can be done by looking at patterns in past economic news releases or by
understanding a country’s economic situation.
Short-Term vs. Medium-Term vs. Long-Term
Deciding what time frame we should use is mostly decided by how much
time you have to devote to the market on a day-to-day basis. The more
time you have each day to trade, the smaller the time frame you could
trade, but the choice is ultimately yours.
Short-Term trading generally means placing trades with the intention of closing out the position within the same day, also referred to as
“Day Trading” or “Scalping” if trades are opened and closed very
rapidly. Due to the speed at which trades are opened and closed,
short-term traders use small time-frame charts (Hourly, 30min, 15min,
5min, 1min).
Medium-Term trades or “Swing Trades” typically are left open for a
few hours up to a few days. Common time frames used for this type of
trading are Daily, 4-hour and hourly charts.
Long-Term trading involves keeping trades open for days, weeks,
months and possibly years. Weekly and Daily charts are popular choices
for long term traders. If you are a part-time trader, it might be
suitable to begin by trading long term trades that require less of your
time.
Discretionary vs. Automated
Discretionary trading means a trader is opening and closing
trades by using their own discretion. They can use any of the trading
styles listed above to create a strategy and then implement that
strategy by placing each individual trade.
The first challenge is creating a winning strategy to follow, but the
second (and possibly more difficult) challenge is diligently following
the strategy through thick and thin. The psychology of trading can wreak
havoc on an otherwise profitable strategy if you break your own rules
during crunch time.
Automated trading or algorithmic trading requires the same time
and dedication to create a trading strategy as a discretionary trader,
but then the trader automates the actual trading process. In other
words, computer software opens and closes the trades on its own without
needing the trader’s assistance. This has three main benefits. First, it
saves the trader quite a bit of time since they no longer have to
monitor the market as closely to input trades. Second, it takes the
emotions out of trading by letting a computer open and close trades on
your behalf. This means you are following your strategy to the letter
and are not able to deviate. And third, automated strategies can trade
24 hours a day, 5 days a week giving your account the ability to take
advantage of any opportunity that comes its way no matter the time of
day.
It a MUST READ article for all Freelance customers here before they press the New Job button, to minimize the arbitration procedure.
"Unfortunately, not all authors are successful traders and not all successful traders write books. Many special web resources are created only to earn profit for their owners, as it is much more difficult to trade your own money than to issue forecasts and teach trading systems."
That's realy true!
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New article How to Make a Trading Robot in No Time is published:
Trading on financial markets involves many risks including the most critical one - the risk of making a wrong trading decision. The dream of every trader is to find a trading robot, which is always in good shape and not subject to human weaknesses - fear, greed and impatience.
Author: MetaQuotes