Forex Mechanical Trading
Systems
More Details about Forex Mechanical Trading Systems here.
Forex Mechanical
Trading Systems? Should an Experienced Trader Use One?
Most successful
FOREX (foreign exchange) traders use a lot of different trading
tools and strategies. It depends on the currency pair, price
action or pattern, volatility or many other variables.The fact
that a trader needs a basketful of strategies indicates the need
for at least one forex mechanical trading system even for old
time traders.
It used to
be that developing, testing, and running a mechanical trading
system was very expensive and complex, coupled with costly real-time
data feeds required an incredible investment of time and money.
Also, the quantity and quality of brokers offering services was
once very limited.
In recent years
things have changed considerably. There are many free automated
trading platforms available from different brokers. The most
popular platform is MetaTrader 4.0, which uses the MQL language
to allow the use of what is called an Expert Advisor or software
program that trades automatically. These programs are generally
called Robots although they go by many different names.
The platform
is free, and most brokers allow demo accounts, there is an excellent
opportunity for a FOREX trader to evaluate their mechanical trading
robot choice without incurring any upfront cost except for the
software program itself and the software programs ar not expensive.
But what are
the benefits of using a forex mechanical trading system? Generally
there are at least three good reasons:
#1: The trader's
own strategy may be tested against the software program to indicate
the compatibility of the two and settings in the software can
be adjusted to suit the traders' own strategy. Adjustments can
be made accordingly. All Robots have a lot of different settings.
You should start with the most conservative settings available
and adjust upward as you observe performance and gain confidence
in the system.
The first step
in a mechanical trading system is to test its behavior under
fire. This includes both the trade entry and exit points, the
stop loss and limit as well as the conditions for exiting should
be completely tested. Often the Robot knows when to buy or enter
the market. However, most robots don't exit the trade very well.
The tendency is to maintain a trade position too long with the
anticipation the the market will change. I personally like to
observe when the robot has entered the market and take an early
exit when there is a good profit on the table. Or in the case
of a sudden loss the trader can exit quickly.
For many traders,
articulating their trading strategy proves to be revealing and
enlightening. The revelation of trading choices through this
exercise alone makes the use of a forex mechanical trading system
worthwhile.
#2: Testing
First of all...
TEST the System!! Paper trading with a demo account is always
available and relatively easy.. Fortunately, most brokers offering
free demo trading system platforms provide the perfect environment
for performance testing. However, if you read the blogs diligently,
you will see that the guys that are dedicated to this type of
trading generally have more than one robot trading at the same
time and they find that each robot may trade differently if they
are trading different brokers or if they are trading a demo or
live account.
Some situations are difficult to understand. One trader stated
that he had a loss with two robots while three others were making
money all with the same brokers, robot, time frame and settings!
Remember that these programs are all digital and therefore if
an entry or exit point is missed, it may not be picked up immediately
and the software will not retrace and pick it up. I have had
'pending orders' go by and not register with the broker. I don't
know whether this is due to the robot or the software that links
to the broker. I recommend that once a trade is initiated, that
you watch it. The robot may be touted as a 'set and forget',
but it's your money and you will be the loser if the software
makes a mistake.
Testing is
as simple as pushing a button. Of course, a great deal of testing
may be required, and the results may be surprising! Yet, testing
is a relatively easy task.
#3: Discipline
A byproduct
of testing with a demo account is that it prepares the trader
for the actual performance of the system and will delineate the
expectations of the trader.
The main benefit
of defining an accurate expectation is discipline. When one conducts
tests one will comprehend the random nature of each trade. This
prevents a trader from assuming too much risk. While testing,
the trader will see many perfect setups result in losers, but
it will also provide insight in to the positive aspects of the
software. I personally like to take profits no matter how small
the are. The other day Ihad a trade going and it was up to $300
which I should have taken, but I let it go and it dropped to
$100 in seconds.
#4: Rules
Consistently
executing a strategy is a most difficult task. The ability to
interpret market behavior through a cloud of emotions is something
few of us do well. The outstanding plus of a forex mechanical
trading system is its ability to execute trades according to
pre set rules without emotion.
The investment
required to develop, test and execute a mechanical trading system
is considerable compared to the retail price of the robot since
most are around one hondred to two hundred dollars.
You may find
that you will try more than one Robot before you discover the
one you like, so in my website I discuss the benefits of several
for your information. You may also want to read the blogs and
raise your comfort llevel.
Using a robot
or software program will greatly reward you as a trader and will
include many of you who otherwise would be excluded from this
once exclusive club.
If
you buy a software program from my page within
the next 48 hours...
I
will give you FREE my FOREX
TRAINING manual, a $57 value as a bonus so that you
will understand what the Forex Mechanical Trading Systems are
doing. You will be able to correct any errors the forex software
makes. In particular, the failure to sell when the market hits
a 'stop loss'. (You've got to sell it manually).
That's
right -- I'll give you the ebook "Forex Training 101"
that I created so you will know what you are doing and can start
trading and making money that much faster... just email me with
your receipt number and I will send you a link to download the
ebook.
Nobody
else will give you that essential help to get you started and
know what you are doing... you'll just be given the training
software and told to sink or swim. You can make good money doing
it that way, but it's like jumping into the deep end of the pool
while having no idea how to swim...
"You
Get To Your Financial Dreams NOT By Working Hard... But By Working
Smart!"
Forex Trading Systems
plus comprehensive
information on how trading really works and what the training
software is doing while you are sleeping. Just email me with
your purchase receipt number and I will send you the download
link. xarda@lycos.com
So,
back to my synopsis of Forex Trading Systems...
As
part of the Forex Trading System, you don't need to work on different
side skills since they are discussed in the "Forex Training
Manual".
However,
these skills are completely taken over by the ROBOT. Yes, the
robots have taken over the world and the 'Best' robot states
that their winning trades are greater than 95%. Furthermore,
they are in the process of updating the software so it's even
more accurate.
Before
reading the other pages in this Forex Trading Systems website,
make sure that you sign up to my free International Currency
Trading strategy mini manual, direct from the commodities traders,
the real blood and guts guys.
Resistance,
Support and Volume is where it's at. When you understand these,
you have the complete concept.
FROM
THE BLOGS
You
are absolutely right about how brokers deal with winning robots
but actually its the way they deal with manual traders too.
If you are constantly winning and they are losing they will always
try to stop you closing trades unless you already have a tp or
stop loss (sl) on their system (never the case with EA scalpers).
Once you have good 'ea' or 'system' never trade more than 1 lot
unless you have a reputable broker or you will be guaranteed
to lose in the long term. You will just get so frustrated when
your normal 6 out of 10 wins becomes 4 out of 10 and that is
all the broker needs to change the odds in his favor. Lets face
it Alpari has good spreads but only to attract people. Do you
really ever hear of someone trading large lots and making mega
money with an EA?
Simple
reason why people sell Robots at $50 each to 2000 people because
if they were as good as they say you would be a millionaire in
2 years!!
BE CAREFUL as these robots really do work... but when its serious
money (lots) do you really think the brokers will let you take
it away from them..
The only way I see it working is to have multiple accounts with
small lots but even then they might get wise..
Maybe
multiple accounts with different brokers and small trading lots.
In other words, stay below the radar. (Ed)
click
here for reviews on each forex software
