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8 Marvelous Algorithmic Trading Strategies - 2019

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  • 8 Marvelous Algorithmic Trading Strategies - 2019

    In simple terms, Algorithms + trade = algorithmic trading are also quite often known as or mixed with automated trading strategies. But, what exactly does that mean?

    So, if you want to know about-

    - What is algorithmic trading

    - Pros & cons of algorithmic trading

    - Best algorithmic trading strategies

    Then you should DEFINITELY read this one out.

    What algorithmic trading?

    Algorithmic trading is a trading system that facilitates buying/selling decisions in the financial markets by using advanced mathematical tools and strategies.

    In such a system, the need for human traders are minimized and thus the decision-making process is very fast.

    This allows an automated trading system to take advantage of any profit-making opportunities arising in the FX markets long before human traders can even see them.

    As institutional investors handle a large number of trades per day, they are the ones who made great use of algorithmic trading strategies.

    Before we list out the top 8 algorithmic trading strategy Forex, you should know the pros and cons of algorithmic trading before you apply it to your everyday life.

    Pros and Cons of Algo trading Forex

    Pros

    Minimizing emotion: This trading system minimizes emotions during the trading process.

    Backtesting: Backtesting trading rules apply to historical market data to determine the feasibility of the idea. When designing a system for algo trading, all rules must be absolute without any interpretation.

    Preserving discipline: As defined trading rules and trade execution is done automatically, discipline is maintained even in volatile markets.

    Achieving consistency: Allows traders to achieve consistency with the trading plan.

    Diversified Trading: Permits users to trade using multiple accounts or strategies at a time.

    Cons

    System failure: A so that trade can be on the computer, not the server, which means that if the internet connection is lost, the command may not be shipped to market.

    This could create a deviation between the theoretical trade generated by the strategy and order platform component that turns them into real trading.

    Monitoring: It is possible to the automated trading system has experienced an error that can result in lost orders or duplicate orders due to technical failure, such as connectivity problems, loss of power or a computer crash.

    8 Best Forex algorithmic trading strategies

    Many sophisticated trading algorithms aim to reduce emotional disturbances and disruptions in the trading process. The following trading algorithms help traders and brokers in executing a command and provide optimal solutions.

    # 1 Trend-following trading strategy

    Track and follow the market trend lies in the heart of the trend following trading strategies. Traders can set the right technical conditions for the buy and sell orders.

    Also, it is possible to take into account previous historical data and future projections build on this basis.

    In the world, you can find AEIEVE cryptocurrency using this strategy, combined with their own AI systems.

    # 2 Mean reversion trading strategy

    Mean reversion trading strategy is an algorithmic Forex strategy is based on the assumption that the market ranges between 80% of the time.

    Terminal implement this strategy usually calculate the average price of the asset based on historical data. In addition, they place a trade in the hope of the return of the current price for an average price.

    # 3 News-based trading strategies are based

    Next, news-based algorithmic trading systems can be a good option for more adrenaline-loving traders.

    In this strategy, the trading system is basically connected to the newswire. actual data compared with the market consensus or previous data.

    After that, depending on the results, trading signals are generated. A trading strategy can be very profitable but also involves the possibility of high risk.

    # 4 The market sentiment based trading system

    For those involved in trading strategies based on market sentiment, this process clearly: observing systems and the specific trading instrument detects net short and long positions are extreme.

    Whether it can use the Commitment Traders (COT) Report of collecting information. The latest approach also allows scanning social media to find a bias toward a particular currency.

    # 5 Arbitrage Strategy

    To make a significant profit with arbitrage strategy, you'll need to trade in a great position. In particular, the strategy implies finding the price imbalance in the market and make a profit from it.

    However, usually, the price difference microscopic and quickly removed when discovered.

    In addition, one popular strategy in this classification is triangular arbitrage. It involves two currency pairs and cross-currency between the two of them.

    Cryptocurrency exchange used to have a huge arbitrage opportunity in 2017. Thus you can see people open accounts and account Binance Huobbi and several other accounts, mostly in Korea and looking for the difference in price.

    # 6 high-frequency trading strategies

    High-frequency trading is often mixed in with the world of retail Forex scalping. However, in reality, scalping Hfq including but not limited to it.

    In this case, the high trading volume and rapid price fluctuations are the best characteristics of the strategy. Trading was closed in milliseconds, and the system itself operates at the speed of light.

    This strategy can be used here is arbitrage and scalping and basically involves rapid fluctuations in price and high volume trading.

    Japanese and Korean traders in particular focus on high-frequency trading. In fact, the exchange cryptocurrency Huobbi conducting a conference dedicated to Hfq in various parts of the world.

    # 7 Iceberging Trading Systems

    large financial institutions prefer to maintain secrecy about their position in Forex. That is the reason why they do not place their orders for only one broker, but instead, divide it into smaller position and run it under a different broker.

    This scheme allows them to place smaller orders at different times, which prevented other market participants from finding out.

    Financial institutions can trade under normal market conditions in this way, to avoid price fluctuations that suddenly. What other traders see usually only the "tip of the iceberg", but not the entire image itself.

    # 8 Stealth

    Strongly associated with the previous strategy, stealth is one not tolerate mystery behind the "iceberg".

    This algorithm is designed to assemble the pieces of the order. In this way, market watchers will find out if the big players to hide behind.

    Conclusion

    Algo trading is the number-based approach to trade filtering helps traders to approach trading with a calculated way, to eliminate the risk and increase the ratio of risk-to-reward.

    Not only does it save time, but spend a lot of human error and help traders to find the signal strong potential for Forex trading.

    In our modern world, the AI ​​system is being combined with the algo trading strategy. We can expect to see this area develop and grow as we see growing AI-based trading system.
    To conclude, I really hope that MAY these strategies will probe helpful to you and if you have any topic in mind that you want me to cover for you then please let me know.
    Best Of Luck!
    Top 10 Tending Forex Brokers Reviews 2019

  • #2
    Thank you for the detailed explanation.

    Comment


    • #3
      Thank you for the recommendation.

      Comment

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