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Automated trading...times have changed!

Discussion in 'Forex Articles' started by MichaelAtlanta, Jun 11, 2012.

  1. MichaelAtlanta

    MichaelAtlanta Recruit

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    Hello guys!

    I love all of the great information you all provide. I happened across the following article on the Internet. Although it is primarily about stock trading, the exact same can be said of Forex. Very interesting and informative:

    Computer trading models crash from favor | Reuters
     
  2. Pharaoh

    Pharaoh Colonel

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    Interesting.

    I seem to recall that forex bots had a similar shakeout when the great Euro bull run ended in 2008. A lot of them were simple trend followers that bought EURUSD on dips. A lot of the metal trading robots also decided that only going long on gold was a smart strategy, until a gold correction triggered a margin call.

    With the current unpredictability of markets, I won't say EAs and other forms of automated trading are worthless, but I will say that any that rely on a single trend following strategy and don't use hard stops are begging for a wipeout.
     
  3. ladytrader

    ladytrader Private, 1st Class

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    Yep, completely agree. Relying solely in automatic trading is suicide.
     
  4. TadS

    TadS Private

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    That is a very interesting article. However, I really do believe that automated trading has a place in any diversified trading system. There are ways to make sure that it isn't following a long or short bias and can work in a variety of market conditions. While these programs can still be very risky, with proper money and risk management principles they can be made into viable trading programs.

    Still, a lot of time must be spent building an automated trading program and making sure you understand its pitfalls and limitations before investing any non-negligible amount of money.
     
  5. Rambo35

    Rambo35 Corporal

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    It boils down to the individual. I do not like automated trading which is why I do manual trading.
     
  6. elisab

    elisab Corporal

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    I agree with the article. The problem is that almost all the algorithms are based on historical correlations that have failed, for example gold and dollar, or bonds and shares.
     
  7. kamuta

    kamuta MQL45 Representative

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    Market trading is just a game and not a most hard game... You must remember that programm already win human in chess game... The only thing needed for good algorithm is error-free trading/playing - this way I hope to build soon algorithm for most complex (as for me) game: poker...
     
  8. DitterPD

    DitterPD Private, 1st Class

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    Good luck with that. Yes, there are poker bots for low stakes and you probably can make somewhat good robot for scalping small amount of pips, but there is a long way to go (if ever) to make an automated robot trader, who will beat the market. I just can't imagine such robot without constant human monitoring..
     
  9. johndz

    johndz Private

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    I read in the last yeras about automatic exchange and bots, but I think is risky, those who sells the bots say that is secure, but they say it for sell the software, I guess.
    Its would be nice a perfect software that make the work and avoid loses.
     
  10. Jussar

    Jussar Private

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    Very helpful article, probably the best thing about automated trading is the possibility to trade without any emotions that can associate with the manual trading.
     

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