Tag Archives: algo trading

  • -

What is ALGO TRADING PROCESS

Algorithm trading is also known as automated trading, black-box trading, or algo-trading. It uses a computer program that follows a defined set of instructions to place a trade. The trade will be able to generate profits at a speed and frequency that is impossible for a human trader.

The instructions should be based on timing, price, quantity, or any mathematical model. Along with profit opportunities, algo-trading gives markets more liquid and trading more systematic by doing away with the impact of human emotions on trading activities.

mt4 auto robot software - algo trading in mcx commodity india

Benefits –

  • Most of the trades sell at the best possible prices.
  • The trade order placement is quick and accurate (there is a high chance of execution at the desired levels).
  • Trades are on time and instantly in order to avoid significant price changes.
  • Reduced transaction costs.
  • It provides the option of simultaneous automated checks on multiple market conditions.
  • It reduces the risk of many pertaining errors when placing trades.
  • Algo-trading can be backtested by using historical and real-time data that is available to see if it is a viable trading strategy.
  • It reduces the possibility of mistakes by human traders based on emotional and psychological factors.
  • Almost all the algo-trading today is based on high-frequency trading. It attempts to capitalize on placing a considerable number of orders at rapid speed throughout multiple decision based on various markets and parameters that are also pre-programmed instructions.

Process-

One can quickly start the Algo trading in their trading pattern by following simple steps. First one needs to create or formulate a strategy which would do the auto trading. All auto trading works on the MT4 platform. One should research and formulate the strategy with an aim to get the highest possible profits. Once the strategy is complete, the procedure needs to be coded accordingly. Then comes the ‘examining’ part.

Backtesting always helps the trader to check if his/her strategy is full proof or not. Through backtesting, the process checks much historical data with the help of the strategy formulated. Without verifying with past data, the strategy has the possibility of being failed.

Algo trading is useful in many forms that include-

  • Many Mid- to long-term investors like pension funds, mutual funds, insurance companies use algo-trading to purchase stocks in vast quantities when they do not aim to influence stock prices with discrete, large-volume investments.
  • Loads of short-term traders and sell-side participants like brokerage houses,speculators, and arbitrageurs also depend on this for trade execution.
  • Systematic traders like trend followers, hedge funds, or pairs traders also use algo trading in order to program their rules of trading and let the program trade automatically.

Technical requirements-

  • Sound Computer-programming knowledge to program the required trading strategy, hired programmers, or pre-made trading software.
  • Robust Network connectivity and access to trading platforms to place orders.
  • Access to market data feeds are generally checked through the help of this algorithm for opportunities to place orders.
  • This also comes with fantastic ability and infrastructure to backtest its own system. Once it is complete even before it goes live on real markets.
  • The Available historical data for backtesting depends on the complexity of rules implemented in the algorithm.

Advantages

  • With algo trading, the algorithnm plays the main. So, there is no place for human emotions. As there are no emotions on the place of trading, traders can feel the ease while trading. As the computer moves the test only, the trader cannot hesitate or question the trade.
  • It allows the trader to trade at his own comfort. Traders do not have to sit in front of their computers all the time to execute the trade.
  • The algo trade would help the trader in placing his own orders with the help of the strategy. This also helps in fixing certain trades so traders’ sleep won’t be disturbed.Managing various trade and positions is a massive task for traders.
  • With the help of algo trading, one can easily place multiple orders and manage them as per the strategy fixed. You can quickly achieve diversity through algo trading. It can surely benefit the trader with huge profits as well.

Conclusion

Algo trading can introduce a discipline that is necessary for trading. After a few failures and losses, traders usually divert from their strategy. But, algo trading will omit the emotion part and help the trader to place the right order at the right time.

 


  • -

All you need to know about Expert Advisors

popular mcx mt4 auto trading software in india

What are Expert Advisors?

Expert Advisors (EAs) are a couple of software running on the Meta Trader Platform. It can just advise traders on which trade needs to be done. Through this, it also can be programmed to execute the trades automatically. Once the position gets fixed, the expert advisor can add close conditions including stops, trailing stops, and limits.

This software is very flexible which can take any information into account that is available on the Meta Trader platform. A proprietary programming language called Meta Quotes Language Version 4 is present while completing this program.

How it Works?

EAs work by letting you decide the parameters through which you can find opportunities and even open and closed positions. This can also be completed by using the use of a set of yes/no rules to trigger trading decisions. The trader himself can set the EA’s parameters, or you can also import them from someone other pre-build design.

By analyzing numerous yes/no rules into a complex mathematical model, EAs make sophisticated trading strategies by utilizing computational strength to make decisions and act on them instantly.

Why Expert Advisory is Popular-

People often love to have money which will be used to make more money. It can only happen when you are utilizing your investments in the market in open positions. And the gains are either withdrawn or used to open larger or more profitable positions which may make more money. With the help of EAs, there exist loads of yes/no rules that trigger a trade to open or close.

  • Saves Time:

EAs also save a lot of time for the trader. An already programmed EA can monitor hundreds of markets, which implies you don’t have to watch price movements all the time in a day in order to find new opportunities. You can also decide how much time you dedicate with the help of EA in a particular task.

  • Not emotional

EAs also help to trade with no emotions. Emotions often encourage the traders to hold on to a losing trade for longer than you should as you cannot realize the loss, or dive into a reckless trade too quickly, riding high off a big win.

  • Flexibility:

EAs also give the flexibility to trade using MT4. It takes lots of information into account like price movements, economic announcements, technical indicators or even your current available balance.

  • Backtesting:

It also allows traders to backtest. In order to prepare a strategy, traders often learn from history. This can also implement Historical steps in order to check whether the steps are profitable or not. One can easily do this without losing anything. Backtesting is nothing but running one strategy against a chunk of real historical data and seeing how it performed. It helps to weed out any issues before they end up losing you real money.

  • Great Accessibility:

The accessibility of EAs is also one of the most significant factors. One can easily build his strategy or directly can export the strategy from someone else. By importing one can get the critical ideas of trading pattern and it would need simple tailoring.

Is there any Risk in Expert Advisory?

There are multiple inexpert advisors present. They cannot be as true and profitable as they claim. Before buying a ready made EA, one needs to be very careful and do his/her own research. A ready made As EA can only help a specific group of traders changes is done accordingly.

There is a definite lack of human touch. And EA can be complete with all the good and profitable norms, but it can never surely beat the human brain. The complete absence of human emotion is also bad for the trading career.

The EAs can run on MT4 platform, which you have to install before utilizing this program. Which means you can only use it from the device it is present on. Thus, the EA can only run when the PC is on.

Virtual Private Servers (VPS)-

A VPS is an online version of the MT4 platform which allows the EA. The online version is hosted on an external server, enabling your EAs to operate even when your computer is switched off. Through it, you won’t have to stay with a computer always.

One can easily his own EA or directly can download someone else’s model. Whatever the way might be, it surely needs back testing, so that you can reap maximum benefits out of it.


Paid Trial

Translate »