Currency Secrets

Auto Trading the Forex Market

ryan — Tue, 07 Jun 2011 10:31:08 +0000

5 years ago I wrote a blog post about auto trading the forex market. In that article I wrote about several forex brokers who were offering this service to their clients, at the time these were:

FXCM

Oanda

Gain Capital (FOREX.com)

CMS Forex

I also mentioned the popular MetaTrader platform which has since gone through a couple of major revisions now providing users with the same type of functionality. However, at the time I was looking for brokers that had this functionality as a service, whereas MetaTrader was software.

MetaTrader has come along way since I tinkered with the software many years ago and several large forex brokers participate in it’s Automated Forex Trading Championship.

But apart from MetaTrader what has improved over the past 5 years?

5 years ago there were other popular providers that claimed to provide users with an autotrading experience, these were:

Fabre Factum – they provided one of the most expensive services, and their site no longer seems to exist, so either the developers have moved on or they are perhaps trading under a different name.
Trade Bullet – I don’t know if 5 years ago they were in partnership with several forex brokers as I commented about them not offering services with forex brokers I used, it seems now though (if things have changed) that they provide their service through other popular autotrading software solutions. That kind of makes me wonder whether they’re being a little redundant – i.e. interfacing with MetaTrader which is itself an autotrading piece of software doing the same thing as TradeBullet… one of you is redundant if you have two things doing the same. But, perhaps TradeBullet provide an easier interface for non-programming types. At least they’re still around!
Trade Bolt – was apparently a competitor to Trade Bullet and it seems have also gone MIA. At the time they provided automatic trading support through Gain Capital, but unless they’ve also changed name or perhaps been bought out they’re nowhere to be found today.
Trade Robot – they also seem to have changed. Once they were providing automatic trading support to FXCM, but now seem to be offering their own managed fund! They must have stumbled across a winner and are now using this to make more money.
HyperOrder FREE!
Again nothing seems to have changed much throughout the years, they support various brokers such as FXCM, RefcoFX, MAN FX, MB Trading, PatSystems and MetaTrader – and even though they supported these same brokers 5 years ago they’re stilled tagged as “New”!?
API Trader FXTS – used to offer a service that cost around US$25 per month (even for demo accounts!) and US$50 per month (for live accounts). It only supported FXCM and was available on various operating systems. Unfortunately though, today they’re no longer around – unless they’ve changed their name!?
SnapDragon Systems are still alive and kicking and 5 years ago they were looking for beta testers to trade their system through TradeStation on to Oanda’s platform. Now it seems there’s nothing to indicate that this ever eventuated and now they provide programming services to those who wish to automate their system.

So those were the popular auto trading systems then. What can we learn from history in regards to auto trading? Probably that it’s still an evolving technology. Essentially it’s important that you as a forex trader develop the skillset in being able to programme your own system. This would either require hiring the skills of a programmer (a much quicker and easier option that could set you back a few dollars) or spending the quality time to do it yourself (which could take longer yet be more rewarding for your long-term trading career).

Whatever the choice, it seems that you can’t go too far wrong with MetaTrader and if there were a platform I’d steer towards today it would be MetaTrader – a fast growing community!

Have there been any new contenders in the forex market with auto trading?

Technically Speaking Fundamentals Move Markets

ryan — Tue, 07 Jun 2011 07:05:28 +0000

I used to be a technician ONLY. If anybody began raving about fundamental reports I would usually shoot them down in a ball of flames about how idiotic it was to follow fundamentals and how silly trading from them was. No one, in my mind, could be a trader and a fundamentalist. Technicals all the way.

However, when I moved over to the forex market it was a complete overhaul of my thinking in regards to this.

While technicals have a purpose in most trading situations, and while you could theoretically get away with just trading technicals I think that you are personally shooting yourself in the foot and doing yourself a massive disservice if you aren’t alert to the fundamental reports that often released to the forex market.

I know many traders, myself alike, who initially ignored such reports and would often be either whipped in, or whipped out, or whipped in and then out, from extremely volatile fundamental reports.

If you trade on any intraday basis you would need to factor in economic reports and releases.

How?

The best resource I know of that I use is Forex Factory a great site that lists pretty much every economic report to be released throughout the week. Eventually, after some experience you’ll begin to get a feel for which reports are more meaningful, however, if you’re new Forex Factory helps users by colouring announcements an array of yellow, orange or red (to denote volatility) to give you a guide.

So please check it out and take heed of forex announcements.

“Those who fail to plan, plan to fail”

ryan — Wed, 01 Jun 2011 10:30:17 +0000

Did you know that those who fail to plan, plan to fail? Do you know why though?

It might sound like a nice axiom with its play on words, but it’s true!

Can you imagine if Apple never refined its product line, or Microsoft stayed with its original Windows operating systems, or Michael Jordan never tried practicing better after being knocked back after his failed college tryouts? Strangely, most forex traders would think that such questions are crazy! Yet every day forex traders do the same thing.

There are some people who…

Have a trading strategy in their heads. They have some idea of what they’re doing, but when they see the big pips move and the currency screens flickering like a pokie machine those internal trading strategies that were in their heads seem to have been drowned by emotions and have popped out their ears!
Have created a trading strategy that is absolutely perfect. They never touch it, never update it, hardly look at it and before long it’s either found at the bottom of the third drawer on their desk, or “accidentally” fallen behind the desk down where all the cables are.

So here’s what you should do.

If you don’t have a trading plan, create one. Right now. Is there a right and wrong way to write a trading plan? Maybe, but I’m sure you’ll figure it out.

If you have a trading plan – PRINT IT OUT!

I don’t know why, but in this new technological age we seemed to be afraid of paper. Nobody likes printing things out. We fear Al Gore will come and beat us over the head with a tree branch from the Amazon or something. It’s okay. And if it really bothers you either print on recycled paper or print at your local stationery store.

If you’ve done all the above then I want you to keep your trading plan on top of your desk and I want you to become attached to your trading plan. I want you to write notes all over it, scribble on it, doodle on it, treat it like a dear diary every time you have a thought, every time you have a cry, every time you have a laugh.

A trading plan isn’t a static document just like the forex market isn’t static, or Apple, or Microsoft, or… Michael Jordan (okay, so he’s retired so he’s more static now than in his heyday).

Review your trading plan once every three months, or one every month, or maybe once every six months, or maybe once every 143 days. Whatever it is YOU decide.

BUT REVIEW IT AND REVISE IT.

Your trading plan is an extension of YOU – almost like a limb – if you nurture it and take care of it it will nurture you.

Don’t be lazy.

“Here’s my forex trading strategy”

ryan — Wed, 01 Jun 2011 10:05:14 +0000

A great way to start forex trading is to get somebody else’s trading strategy and then adopt it as your own. It’s also the same way a lazy person bumbles their way through forex trading.

So what’s the difference?

A lazy person will generally hop from one trading strategy to another. There’s no commitment, no effort on their part to continually refine the strategy and even if they did it would be a major overhaul of the components of their system. Whereas a good forex steward is someone who takes a strategy and looks at ways to improve and mould the strategy around their own personal tastes/risk capacity and experiences.

The trading strategy is them. It’s their persona expressed in methods for making money out of the forex market. It would be no different if they were running a business.

So does this seem like you?

Or are you somebody who ambles around from one method to another, hunting around forex forums looking at what somebody else has concocted up and decided to give their strategy a go?

Maybe it’s time you started looking inward instead of outward: what do you really want? Why are you here?

Why not start trading end of day?

ryan — Tue, 31 May 2011 12:26:47 +0000

One of the biggest issues I see with most people who start trading the forex market is that they think it’s easy and it’s ripe for the plucking.

People are sold on the hype that millions can be made in a matter of minutes and that they can be a part of the action 24 hours a day 7 days a week.

Unfortunately the very thing that allures traders into the forex market ends up being their very downfall! Much like how the seamen were allured by the seducing sirens – only difference being that man doesn’t need to sail the high seas anymore, they let the sirens come right in!

Generally when people ask me where they should start trading I tell them that they should start trading the forex market using very little leverage (start 1:10) and on an end-of-day basis only.

Of course, nobody wants to hear that.

“But what about my millions?” they ask, flabbergasted.

It takes time and it takes effort and if anyone tells you any different RUN (don’t walk) the other way.

Forex trading is tough and while it might seem as though you can make millions in a day, you can just as easily lose everything too. I’ve seen it time and time again. If you can pull yourself away from the dazzling lights of your forex trading platform and concentrate on putting your energies into refining a better trading strategy then you’ll have better hope.

Staring in front of a computer all day will only allure you.

Trade end-of-day. Then, if your forex trading ride becomes painful it will become a lasting memory rather than a quick sharp burn for the idiot who decided they could do it trading intraday.

If you can’t make it trading end-of-day forex, what hope have you going intraday?

Can I use forex indicative data at all in my backtesting?

ryan — Mon, 30 May 2011 10:46:28 +0000

Short answer – yes, you can.

BUT, it depends on the timeframe you test your forex system on as there is more “noise” in indicative data.

Sometimes when I’ve had an idea to test on the forex market I will pull out some of the better forex indicative data providers and test my strategy. Generally though these tests are done on a timeframe of days and weeks – longer term data.

Whenever I move to forex ideas that are more shorter term than this I move away from indicative data.

So in essence indicative data is okay. It can be a cheap and easy option for people to check their forex trading strategy, but provided you are aware of it’s limitations then feel free to test away!

One provider who I have used for quite some time and has been on the whole the most reliable with indicative data has been Premium Data, they also have an extensive FAQ page to help you understand when the daily bars are processed. Data is clean and they provide 41 currency pairs as well as their flips.

If you use other indicative forex data providers please add them in the comment section below.

If you have used or are using Premium Data write a review about their service here.

Currency Secrets is back!

ryan — Sat, 21 May 2011 00:28:50 +0000

After a small little break away from it all we’re back in the drivers seat and giving the good old Currency Secrets website a makeover!

Throughout the coming months expect there to be more and more changes as we roll out some exciting new ideas. As normal we’re going to continue to provide an avenue for our awesome community to share their experiences with forex brokers, forex signal providers and forex data, but we’re all starting afresh and encourage all our faithful users to please read our review pages and to write their reviews in the prescribed format (spammy-like reviews will no longer be kept here any more).

We also will be allowing people to anonymously add reviews as well as allowing users to subscribe to our site and write their own experiences.

So, we’re glad to be back and I’d personally like to thank everyone for their well wishes and the wedding congrats sent to my wife and I – it truly was an amazing occasion, praise the Lord!

We look forward to hearing how you’re all going with your forex trading soon!