admin dezembro 12, 2018

Algorithmic trading has been around for some time in the financial markets.

For those of you who are not familiar with the term algorithmic trading , is the process of using computers to help identify trading opportunities based on the trading strategy that a human trader has to program it.

Why do people use my account trading?

The whole idea of trading is to generate profits through trading of financial instruments. Traders can enjoy the attitudes of anywhere between a few seconds to weeks. The longer a trader holds to a position, the higher the risk that the position they hold may be affected by unexpected events or news.

Avoid holding positions for long periods of time, some traders trade at high frequency. High-frequency traders can get in and out of multiple trades in one day.

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Most good traders have a fixed strategy (or two) that they use for the pages. These strategies include entry and exit signals and the use of relevant indicators to help them make sound decisions.

Algorithmic trading allows traders to program their trading strategies to enter and exit a trade in the computer software. The software will automatically alert traders more trade opportunities that are consistent with the standards for it. The Switch is the profits that can be taken when it hits a predetermined level. On the downside, losses will also be when the traders stop-loss is triggered.

The advantages of algorithmic trading

# 1 Backtesting

Backtesting refers to the process of testing a trading strategy based on historical data in order to ensure that the trading strategy actually works in the financial market.

Algorithmic trading uses backtesting a lot. Trade prior strategies to see if the work before presenting it in their trades. No trading strategy is perfect, but simply better than others, which gives the trade a higher probability of success. Backtesting helps identify good strategies to a certain extent.

# 2 Remove the emotions from trading

When trading winning strategy which allows her to be successful in their trades, and the next thing you need to do is execute trades according to plan. Where the trading account can play a big role in the success of the strategy. As the saying goes, computers don’t have any feeling. Simply follow the instructions given to them by their human creators, or in this case, trade.

Algorithmic trading focuses only on the implementation of the strategy the following have been put in place. Strategy and don’t deviate. If it was good that the stars should appear. If you don’t loss. Human errors or emotions should not play a role in the outcome.

# 3 review and modify trading strategies

As mentioned above, no trading strategy is perfect. Even great trading strategy may not withstand the test of time when market conditions change against. This is why it is important to review and revise their strategies periodically, even when it’s working well.

With algorithmic trading, traders can review their past performance page, How should criticism and ways in which can improve on the strategies. You may also notice a seemingly harmless directions, such as how pages, for some reason, the best performance during a certain time of the day or some currency pairs.

This can help them improve their business decisions so that you choose what works best their trading strategy.

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