What trading robots allow you to conduct stable trading

Probably, the modern trader has an automatic tool with which he conducts the analysis of a financial asset, which also allows him to make a qualitative forecast of further trends and prospects of the currency pair in the fix apiforex market. In the world of automatic technologies, each process lends to algorithmization and trading is not an exception. There are more and more algorithmic strategies on the market, as well as ready-made trading robots that are capable of trading without the direct participation of an exchange speculator.

A trading robot is a set of rules and principles of a trading strategy into a single program code that allows you to withdraw profits from the market on the basis of the work logic. Today, robots are everywhere. You can meet them on the Internet, on the mql service, and also order your own trading system for development. However, such an abundance does not guarantee their quality, therefore most automatic trading strategies are nothing more than simply non-working algorithms.

We all know that not all strategiesallow you to earn a stable profit in the market. So is the case with trading robots, which are written according to these methods (

http://www.forexrobotshub.com/). To avoid buying low-quality software for fix apitrading, I recommend you the following parameters, which you should pay attention to when choosing a trading robot, as well as a list of working algorithmized trading strategies.

To select the most optimal and working algorithm, you should pay attention to the following points:

  • Statistics for the last period. Ask the developer for test results on different currency pairs, but take into account when the test was made. You can require that the developer make a test for the current moment, and you would have reliable data.
  • Financial indicators of trading. On the basis of statistics, thus profitability, we should analyze the trading process. The answer to this question will help you find the indicators, namely: drawdown, profit factor, recovery factor, Sharpe ratio, the profitable and unprofitable trades ratio.
  • A list of current clients and results on real accounts. If the last two points suit you, then you need to make sure of their reliability by querying the results on a real trading account or the trading results with current customers. This will allow you to understand whether the software is purchased and to know what to expect after placing your capital.
  • Support. An important factor is the product support offered by the developer. So, if there are new versions of the robot, based on the current market conditions, you will always receive the latest software.

If you pay attention to the list of 4 points, about which I wrote above, this will allow you to find a working trading robot today. But if you are looking for software for passive earnings, then to this list, I also recommend you to pay attention to the principles and rules of committing trading operations that are set into the robot. To the working data elements, I include robots written according to the following trading strategies:

    • Scalping algorithms. These trading robots can be based on virtually any principle and technique. However, due to the large number of speculative transactions, the risk is also controlled. As we know, the main thing is to save the capital, and only then to multiply it.
    • Grid robots. This approach allows you to earn both on trend, and lateral movements of the market. If you can configure the robot to optimally comply with the grid parameters, then it will allow you to take out a stable profit from the market. The main thing is not to use the principle of martingale
  • Fix api arbitration algorithmic strategies. Due to the speculative principle, it is also possible to conduct risk-free trading. Opening trading transactions based on exchange rate differences allows the robot to surely receive several profit points, and a large number of these transactions turn these several points into more than 30% of the monthly yield (http://forexzzz.com/product/forex-zzz-lock-arbitrage/).

Taking into account the current material, I hope you can pick up a quality trading robot in your fix api trading to stabilize the result in the financial market.

 

Advantages of robots over the manual trading

Most exchange speculators like the process of selecting financial assets for trading: the process in which they can conduct a qualitative analysis and predict the future movement of assets. However, today this task is handled perfectly by trading robots, and in order to compete with them, a fix api trader must jump above his head.

Considering the fact that the number of algorithmic trade transactions grows every year, we can conclude that the absolute majority of participants in the financial market felt the advantages of this trading type. And to such participants, it is possible to attribute both professional players in the form of large investment companies, and beginners who use simple algorithms, written according to their strategy for fix api forex.

The popularity of the trading robots is determined by their basic advantages:

  1. Ability to conduct continuous trading. This is one of the first advantages that all traders consider. Surely, you have often regretted the missed opportunity or the omission of a profitable trading signal. However, there are no such situations with the trading robot. A trading robot is a program that will work until it is turned off by you. This makes it possible to use it 24 hours a day, 5 days a week. Thanks to the VPS servers, the robot connects to the trading account and conducts trading, not missing a single signal.
  2. Conduct a simultaneous analysis of several financial assets. The trading robot is able to update its data depending on the specified timeframe. And if there is a signal simultaneously on several assets, the robot can open a trading operation. All because the robot will trade on those assets, on which it is connected or which are written in its program code. This gives a multi-functional advantage and the ability to expand the list of tradable assets and simultaneously monitor the current situation for them.
  3. With their help, speculative algorithms and HFT trading are implemented. Only with the help of trading robots the result of HFT algorithms is achieved, and without them some trading strategies are completely unrealistic. It is very difficult for the trader to implement a scalping algorithm, not to speak about fix api arbitration (http://forexzzz.com/product/zzz-latency-arbitrage-mt4-advisor/ ), in which it is necessary to simultaneously track the same asset at different platforms in real time. But the robot is able to deal with these tasks perfectly.
  4. The possibility of trading through the fix api. The robots have an opportunity to connect not to the brokerage company’s servers, but to the quotations of the liquidity provider, which allows improving the trading result. Thus, the robot will receive more accurate data, which increases the reliability and accuracy of the trade signals (http://forexrobots.in/2017/06/21/fix-api/)
  5. The absence of a psychological factor. The robot does not have emotions, and if it went into a drawdown, it will not make a pressure on it. After all, the robot perceives these data as just numbers. Nothing more, nothing less. That is why the robot can quickly restore its result and continue to trade steadily.
  6. Trading, according to the strategy logic. Agree that we sometimes go around our strategy and it does not always bring the desired result, does it? The robot will act according to the specified algorithms and will follow only those scenarios that are embedded in the program code. That’s why there should not be unexpected results, because if you know the benchmark of profitability and internal parameters of the robot, it will ensure its reliability and stability.

The above advantages of trading robots over the manual trading make this tool a key element for successful fix api trading. I recommend that you think about automation of your trading process. It does not matter whether it’s a robot or a trading panel. The main thing is to take a step towards the more productive trading.

How to use Moving Average in trading

Surely, each of you has several working tools used in everyday trading. These can be just useful sources of information that you are studying before the start of the trading day, as well as various auxiliary filters that make your trading strategy for the fix apiforex market more accurate. Among the list of these tools, I would also highlight the technical indicator Moving Average. Some people use it within their strategy, but for me this indicator is a filter of market movement and price noise. But despite all this, a number of traders do not correctly interpret this technical indicator. Therefore, I propose to go into more details in the specifics of the most popular technical indicator on the financial market.

Everyone knows that the Moving Average is one of the simplest technical indicators (http://forexrobotshub.com/2017/05/19/trend-indicators/), as it is based on a simple formula that calculates the average price for n past bars. In fact, this is a line on the chart, which displays exactly the average value of the price. No more, no less. The popularity of this indicator caused the appearance of several more variations of this indicator. Thus, there are 3 types of Moving Average:

  • Simple Moving Average – a simple moving average, which is calculated by dividing the cost of n bars by their number. Thus, we obtain the average value.
  • Exponential Moving Average – the exponential average method is based more on the weight given to past prices, hence this indicator is more responsive to the current position of the quotes.
  • Smoothed Moving Average – gives weight to the current prices depending on the selected period. For example, if you use SmMA with a period of 5, the current price will be given to the fivefold weight, the previous candle fourfold, and so on (https://mahifx.com/mfxtrade/indicators/smoothed-moving-average-smma).

Personally, for me it does not matter what kind to use, so I take the most standard one –the simplest one. After all, for me the period is important, and if I take a long period, then what I do, then we will not find a special difference between each of these kinds.

Then, how should you use MA in fix api trading?

Yes, of course, you need to take into account the position of prices by the ratio to the technical indicator. And if the quotes are higher than MA, then this indicates an uptrend. But why does no one look at MA itself? To begin with, you need to understand that there are some methods for determining the breakout of quotations of the indicator itself. If the value of an asset on the fix apiforex market breaks the MA line from the top down, while the MA ​​itself is moving downwards, is it worth considering this trading signal as a fact of a new movement? My answer is “no” and this is a false breakdown. I do not recommend entering positions with this signal. But if the quotes of the asset declined, then moved into a corrective weak movement up. Thus. MA also starts to gradually change its direction and move into a lateral trend. Then, when the quotes break through the MA and the indicator itself starts to grow, this will be the confirmatory filter for opening the trading position.

A similar situation occurs when the quotes decrease and break through MA, which is growing. This tells us that the breakdown is false. But if quotes decrease and break through MA, which is also aimed downwards, then it is worth looking for a point for opening short positions in the fixapi forex market.

In this simple rule, the essence of using the technical indicator Moving Average is laid. Do not forget to look not only at the price itself, but also on auxiliary filters and the position of technical indicators. This approach will allow you to save capital and filter out false signals.

The main tools for working in the MT4trading terminal

The first steps in the financial market, after repeated reading of the professional literature and obtaining fundamental knowledge, are due to an acquaintance with the trading terminal. It is on this software that a beginner fix api trader makes his first transactions and conducts an analysis of financial assets. For most traders, this acquaintance begins with the fix api MT4 terminal.

MT4 is quite intuitive for beginners, but you need to learn how to work in it. That is why, in today’s review, I will analyze this platform. We will learn all the necessary functionality for the trader, as well as hidden moments in the work of this software.

MT4trading platform is an integrated tool for financial markets analysis, through which you can conduct both manual and algorithmic trading. The platform has its own development environment, as well as the ability to connect third-party programs for optimization of each trader, which makes it customizable for everyone.

So, let’s now analyze the key features and parameters of the MT4trading platform:

    • To start with, you should understand that MT4 is intended primarily for working in the fix apiforex market, as well as with the CFD contracts. Therefore, if your trading strategy is based on trading currency pairs, you can safely choose this software.
    • MT4 has several ways of opening trading operations, namely sell stop, buy stop, sell limit, buy limit. This allows you to flexibly approach the asset analysis and the opening of transactions.
    • Speaking about analysis, the program has a number of built-in indicators for this purpose that can be divided into trend, oscillators, volumetric, and user. But the most important thing is that you can connect your indicators, and with the help of the development environment, you can create addition to the already existing indicator. That’s why MT4 became so popular. The ability to more flexibly impose their mathematical interpretations on the chart attracted the attention of million fix api traders.
    • Interaction with the external environment. If you need quotes in current time in excel, then you can download them directly from MT4. The reverse process is also possible, when you add the history of quotes in the software.
    • Ability to test strategies directly in the trading platform (https://www.metatrader4.com/en/automated-trading/strategy-tester). There are many individual programs that a trader purchases in order to analyze the performance of a forecasting tool. But with MT4, you can analyze the historical data in the terminal itself.
    • Ability to trade using fixapi. This approach suits you if you use an algorithmic approach in your trading. Fix api will provide you more relevant and accurate data in the form of quotations, which is an important indicator for some trade robots.
    • The most important and unique in my opinion disadvantage in MetaTrader 4 is the lack of a glass of prices. This does not allow us to analyze the depth of the market, as well as the actual volumes. However, there are additional developments in the form of auxiliary scripts that solve this problem.
    • Well, one of the main advantages of this platform is a direct connection to MQL, because this resource is a MT4developer. Therefore, you can easily subscribe to the trading signals or download and install a trading robot.

MT4 trading platform allows you to conduct a quick and qualitative analysis of financial assets thanks to the individual approach to each trader. A wide list of features and analysis tools raise this platform among the rest of the software. If you are just starting to get acquainted with the financial market, then this platform is just for you.

Different types of trading software

Technologic advance and progress are increasing day by day, and every year we become witnesses of incredible changes of our world, while automation covers virtually all processes and fields. New technologies can make both our professional and daily lives much easier. And if we look at the financial market, we will notice that this field also faced dramatic changes. Many years ago FIX API trading was simply impossible without a phone and a feed, while these days we are able to use one single terminal that contains all the required information to perform trading and execute orders.

However, the technologic progress is constantly developing, and those things, which were recently made by FIX API traders in manual mode, are executed with automatic and algorithmic software these days. Today I want to tell you about such programs. You need to know products available in the market, and which software can be used to increase your trading performance.

Firstly, I want to make a list of several software solutions, which have to be used by each and every asset manager.

Main types of trading software:

– Proprietary indicators

– Process optimization scripts

– Trading panels (Signal panels)

– Trading robots

I put all items of the list by the level of their importance and priority. In other words, the higher is the item in the list, the bigger is the role of such item in trading. Now let’s look at each item of the list more closely.

Proprietary indicators

This software is based on your point of view for specific indicators. I’m not telling that you have to create your own indicators, not at all. I recommend learning basic tools ofFIX APIMT4, and only then developing or improving them. Sooner or later you will definitely make it.

There’s a lot of free software these days, and you can start your work with it. Firstly, I recommend choosing indicators, and only then trying to improve something. Your “proprietary” indicator can be based by someone’s tool installed in your terminal. This option is also considered as great one.

Process optimization scripts

The next stage is the usage of small software utilities, which allow improving the common trading operations. I am talking about scripts, which allow buying financial assets after the price closing (or closing open positions using the very same method), as well as those small tools, which can avoid FIX API Forexspreads by executing trades using bid and notask.

This category includes scripts intended to control the level of your risks. In other words, when the deposit is decreased by a predefined value, such script won’t allow executing new trades during a previously selected period in time. To tell the truth, one can use scripts to implement virtually any solutions, which will make the trading process more convenient and profitable.

Trading panels (signal panels)

In case if you already have your own indicators and scripts, you can combine them, creating a single trading panel. By doing so you will be able to use one panel that contains all the information based on your trading signals. In other words, this panel will contain recommendations about financial assets to buy and to sell. You can just execute new trades using the information from the panel. In fact, you will see your assets and trading signals. You can use the notification system in order to receive all the signals right on your mobile phone or sending alerts right to your trading terminal.

Trading robots

The final stage is to create a trading robot that includes all the items, which I described above. Development of a trading robot is the last stage of FIX API trading automation implementation (http://forexzzz.com/product/forex-zzz-lock-arbitrage/). And if we talk about the automation trading tools, you will probably think about trading robots. You are totally right. According to the statistic control unit of the USA, the majority of trading operations is executed by algorithms.

That’s why I recommend you to follow the trend and use your working algorithm to create a robot that will automate your trading. Always remember that you can start creation of such robot only when you already have a working system.

If you start using various software solutions in your trading, you will immediately improve the overall performance and profitability of your business. No doubt, in order to do so you have to use various algorithmic systems or trading robots which is well described here http://www.forexrobotshub.com/. However, I really recommend creating your own strategy and only then start the process of automation implementation. Such behavior makes it possible to understand the specific moments of the market and understand all the pitfalls of FIX API Forex market.

 

How to correctly install stop loss and take profit?

Each trader has his own trading strategy, which should regulate each action of the manager. I strongly recommend using the basic principles of creating a trading strategy to turn a chaotic approach into a system business.

The trading strategy, without fail, should consist of the following blocks:

1. Rules for determining the entry position point;

2. Rules for determining exit points from a transaction;

3. Risk and money management parameters.

In my blog, I have already written about the first and third point, so today we will analyze the second one.

It’s not a secret that there are only two exit points: with a loss or with a profit. In this issue, fix api trader experiences stop loss and take profitlevels. As I already wrote above, the trading strategy will help you understand exactly where to place these levels, which should be clearly state where to set these exit levels from the transaction. They are individual for each trader. I will help you determine the points of these zones exposure based on the key and basic rules. Thus, where they should be, in order to work correctly and safely.

Stop loss

This level allows you to limit losses in the context of a trade operation. Most traders have difficulties exactly with stop loss. I would not even say difficulties, but rather a refusal to place it in a trading operation. For some reason, many do not place stop loss in their system and over time simply lose their money and get disappointed from the fix api trading. Sometimes, you may not install take profit, but SL should present in each operation.

There are 3 types of correct stop loss placement:

  • Taking into account the risk in each transaction. With this type, the exit from the position will be implemented when the maximum percentage of loss is achieved. For example, if you have a transaction risk of 1% and a deposit of $10,000, then when the deal reaches $100, it will be closed. Thus, SL is set based on a round figure loss.
  • After triggering a turn signal or reaching the system indicator. If you have opened a position for sale but the quotes have entered the channel and all the signals have already changed, it is reasonable to close the position if the TS already points to the purchase (https://www.babypips.com/learn/forex/design-your-trading-system).
  • Behind the local highs or lows. When you have opened trading operations for sale, SL should chase a local maximum, the breakdown of which will be a signal for a trend reversal. The case is similar when there are purchases. This is a kind of analogue of the second point but it is more stable and is used by the fix api traders regardless of the system.

Take profit

As for this level, it acts in opposite proportion to the SL –it restricts profits in the context of one trade operation. I recommend to set TP for each trade operation. But there are exceptions, in which TP does not need to be put. Often, they are connected with the fact that the reason for closing position is a reverse signal or trailing stop of the opened positions.

There are also 3 Take Profit methods for setting the level:

  • As SL ratio. This is one of the most popular techniques. We know that the trader’s work is aimed at a positive mathematical expectation. If the SL to TP ratio in the working strategy is not less than 1/4, and better than 1/6 or 1/7, then the MO will be positive. So the trader opens deals with volume from risk, and the take is determined by simply multiplying by 5-6 from SL.
  • Installation under local support and resistance level. If a purchase transaction is opened, it makes sense to install the TP under the resistance level. If it is a sale, then above the support level.
  • At achievement of technical indicators or Fibo level. Everything is simple. The purpose is the level or values ​​of the technical element.

Placing these levels at opening of trading positions will allow you to save the capital. After all, the original purpose is safety of means, and only then their augmentation. If your system has a positive mathematical expectation, use these levels, and you are guaranteed to get a stable result.

Even algorithmic trading strategies for fix apiforex have the logic of exit from the market (http://forexzzz.com/product/zzz-latency-arbitrage-mt4-advisor/). Thus, those parameters in which the robot bury transactions “in plus” or “in minus.” This allows you to save funds and control risks. This is the main reason for the stability of robots. After all, they will not move these levels and “be greedy.” But the trader may do it. And if you learn to work by installing stop loss and take profit, this will allow you to reduce the psychological burden. You will have to take care only for the strategy and its principles of opening a deal and the parameters of capital management.

 

Trading performance monitoring websites. What’s their purpose?

What is the meaning of success in trading? Some people would say that the key success factor is the breakeven deal, other would tell about the minimum risk level, while some of traders will try to convince you that success depends on the enormous profitability ratio. Each and every FIX API trader wants to accomplish such purposes when creating and developing a trading strategy. As a result all the trading strategies and methods can be divided into aggressive, moderate and conservative ones.

But what do investors have to do in such situation? I’m talking about choosing a trading strategy investment option. How can one choose an asset manager, if some investors want to achieve the maximum return, while others want to save the capital and have the minimum risk level? Here’s another example: how can one connect to a trading signal or buy a trading robot, if they have only description and nothing more? The answer is very simple! One simply can’t.

Nobody buys a car only after reading the user’s manual. It doesn’t work like that. We need to have a test drive and check the car in real driving conditions.

The field of FIX API trading has the very similar situation. One can’t simply make a decision about investments or purchasing of a trading robot by reading only stiff descriptions. One needs to use such tools as the yield curve and other important trading indicators, which can be found on various trading performance monitoring websites, which we are going to discuss below.

I think that some of you have already seen such websites, and understand the main principles of their work. Let’s look at the two of the most popular resources:

    1. MQL –https://www.mql5.com. The website of FIX API MT4trading platform developers offers a section that includes various information about trading signals. This page contains a lot of trading systems shown in the form of a signal. One can subscribe to such signals, receiving information about them right to their account. No doubt that the key factor of such system choosing is the possibility to analyze trading activities, and MQL offers a wide range of such tools. One can see the profit ability divided up by month, the drawdown curve, the balance curve, the funds curve, the main trading financial data (the number of winning and losing trades, their correlation, expected values, the Sharpe ratio etc.), as well as the total number of the followers and the capital size of the asset manager. Such information makes it possible to understand the amount of money invested by the FIX API trader themselves in trading operations.
    2. My fxbook – https://www.myfxbook.com. This is another resource that is pretty similar to MQL; however, it doesn’t allow traders to subscribe on the trading of the asset manager, giving only the possibility to analyze the system itself and it results. This website offers almost similar interface for the list of differentials and indicators, but in my opinion it offers much better visualization methods. The majority of companies and professional trades is using this platform to publish their statistics.

      There are several other websites for FIX API trading results monitoring, but each of them offer strictly individual approach. Such resources include PAMM platforms and special websites for trading robot performance monitoring, e.g. http://fxsocialnet.com/

      But what’s their purpose?

      Such resources can be used to get information about real trading results in order to analyze trading activities of the trader in real time. By using such websites, each and every FIX API trader can connect their trading account in order to analyze trading performance. Such resources can also be use to find the best FIX API trader for your estimated trading results. In other words, you can connect your account to such service and monitor the inter-temporal changes of the key indicators. I really recommend doing so, and monitor your trading activity every week. Choose any day of the weekend when all the main markets are closed, and perform thorough analysis of your trading operations. You will be able to see the influence of each of them on the final result of your trading. By doing so you are able to define all the key moments, which affect your trading in positive ways, as well as the negative ones. As a result, you will be able to use it as a reference point of your personal growth.

Technical and fundamental factors: what drives the market

We all know that the dynamics of supply and demand, the number of speculative positions, the monetary policy of the Central Bank, the achievement of historical highs or lows, and the opening of positions by market makers drives the fix apiforexmarket. To simplify this all, there are two global causes that have a direct impact on the market. The question is of fundamental and technical factors. It is these two bases that explain any movement in the foreign exchange market.

Thefundamentalfactorsinclude:

  • Political news (elections in the country, G8 or G20summit, etc.);
  • Meetings and formal meetings (decision on the interest rate of the Central Bank, OPEC meeting);
  • Publication of statistical indicators (macroeconomic data in the form of GDP, inflation, labor market or publication of companies’financial statements).

The following points often related to the technical factor:

  • Achievement of important historical highs or lows;
  • Reaching the level of support or resistance;
  • Triggering of technical patterns (reversal figures or trend continuation).

As you can see, there are many reasons that affect the market. Every fix api trader should know about them, and also to have an action plan in case of triggering at least one of the above factors. In the event that the manager has a system that regulates the process of actions in each of the situations, then it is possible to declare the professionalism of the trader. But! Some managers refer themselves to the first group (fundamental traders who trade on the basis of obtaining information from market data), and some refer themselves to the second group (technical traders who trade on the basis of obtaining information from technical elements).

And the following question arises: which of these factors and their analysis dominates on the market and is better/more reliable?

My subjective answer to this question is that the foundation is moving the market, but the price itself is in the technical channels.

In order to understand this idea, I propose to consider a particular example.

For example, now we see the strengthening of the euro to its basket of major currencies. The main drivers of this movement are simultaneously the rearrange ofECB monetary policy and at the same time, the weakness of the dollar due to the Trump policy (http://www.investopedia.com/terms/m/monetarypolicy.asp). In the first case, the head of the ECB, Mario Draghi, announced the possible curtailment of the quantitative easing program. Thus, the Central Bank intends to reduce the number of redemption bonds and thereby reduce the money supply in the market. If there is less money on the market, the currency value should be more expensive (the elementary rules of the economy fundamentals). At the same time, we see that Trump cannot agree on any of his plans with the Senate, therefore many investors question the very implementation of the plans of the new president, after the election of which the dollar was rapidly strengthened. Thus, we get a “divergence” between the euro and the dollar and, as a consequence, the growth of the currency pair. This all refers to the fundamental data.

As for the technical factors, at the moment of EURUSD’s growth, a side channel was broken and quotes were fixed above it. This is the first technical signal to buy. After the rollback, quotes also broke through and continued to grow, thereby forming the third upward wave and a rising channel. Thus, we obtain a synergy between the fundamental and technical factors.

This is my vision of these factors’work, which are complementary to each other and are two parts of the same whole. So, of course, you need to have a trading system, but what factors are included in it, this is already a second-order issue, because every fix api trader should be guided in any analysis. Even if you have a trading robot in your arms (http://forexzzz.com/product/zzz-2-leg-arbitrage/), it still needs to be adjusted for actual market conditions).

Lock and averaging: the key principles of work

With the development of financial markets, more and more different types of trading strategies appeared. Some part of them has reached our time, and some have been forgotten long ago because of the transformation of the market itself. The principles of trade were formed under the influence of market trends, market activity, its phase, as well as the general laws that Dow formed in his theory.

Today, these techniques have changed and transformed into some types of trading systems or have become non-standard ways of conducting fix api trading on the forex market. Speaking about the non-standard methods of trade, perhaps, each comes to two conflicting ways of risk reducing:

  • PositionsAveraging
  • PositionsLocking

 

These methods cannot be called standard trading methods, but they allow you to conduct trading in a loss-making position, and also contribute to minimizing and limiting the risks. Therefore, if you are looking for risk management tools, these two non-standard approaches allow you to solve this problem.

Positions Averaging

This method consists in the fact that all trading operations that a trader performs are opened in one direction. Thus, at the time of receiving a loss in one trading position, a similar transaction with the same volume and in the same direction (sell / buy) is opened, as it is unprofitable. Thus, when the quotes unfold and go in the right direction, you can fix a break with a rollback of 50% or a profit for one transaction and a zero result for the second. If you do trade operations using averaging methods but with a large volume, this will already be applied to the Martingale’s trading strategy.

In order to understand the principle of averaging operation, I suggest you to consider a specific example:

The trader opened a deal to buy a financial tool in the fix apiforex market from the level of support for the Fibonacci grid (http://www.investopedia.com/articles/active-trading/022415/placing-fibonacci-grids-key-your-trading-strategy.asp) in 50%. However, this level was broken and quotes continued their downward movement. In order to not fix the loss, fix api trader opens another position to buy, but this time from the level of 23.6%. After quotes rebounded from this level and grew, the trader can fix the result in the no-loss zone or profit from the second operation. Personally, I recommend limiting losses to the exit in the no-loss zone.

Positions Locking is also called “Lock”

This technique also consists in limiting the loss on positions. The essence of this principle consists in fixing a certain loss percentage in order to further reduce it. If we talk about practice, the trader should open the transaction in the opposite direction from the unprofitable one. The complexity of this algorithm of actions arises at the time of exit from the lock. To do this, you need to exit at a profitable position at the most appropriate time in the turn. Locking is suitable for making transactions by algorithmic trading (http://forexzzz.com/product/forex-zzz-lock-arbitrage/), because it is the robot that can exit the lock with the most profitable for the fix api trader.

Let’s also look at an example to learn more about the principle of this technique.

The trader opens a deal for financial tool purchase in the breakdown of an important resistance level. However, the breakdown was false and quotes rushed down. Realizing this, the trader opens a deal in accordance with the trend (for sale) and thereby fixes a certain percentage of the loss (the difference between open trades). Let this difference amount to 20 points. This fixation occurs only on the chart, and not on the deposit balance. The trader holds two positions and at the moment of maximum reduction fixes his sale (profitable deal) expecting the price rollback. When prices roll back by 20 points, the trader will be able to close the loss on the first position, but the trading result will be 0. This allows you to nor permit deep drawdowns of the deposit and loss of investment capital.

Personally, I do not use these methods in my fix api trading because my strategy foresees an immediate exit from the bottle positions. But some traders successfully apply them in their trading strategies as a combination of money management.

Should I use the oscillator indicators in trading?

Perhaps the most common way of analysis and prediction the future value of a financial asset is to use technical elements, primarily indicators. What could be simpler than an automatic process, when it is enough for the fix api trader to look at the chart with the indicators and say what further movement is to be expected. The mathematical justification for forecasting quotations has been applied for several years, not even for the first ten years, because all the key technical indicators were created back in the 70-80’s.

The simplicity and efficiency of these technical elements caused an increased interest in the application of these analysis techniques in their fix api trading. In view of this, many technical indicators have been created, and the key ones can be divided into three groups:

    1. Trend Indicators
    2. Volume indicators
    3. Oscillators

We’ll consider today the last ones.

Oscillators are a group of technical indicators, which in their mathematical basis determine the rate of price movement over time. The main goal of these indicators is that they reflect zones of the so-called “overbought” and “oversold” areas.

The overbought zone signals that quotes at this point of time have drastically deviated from their values ​​and have gone to a range that they have not been for a long time. Thus, if the growth of quotations outstrips the technical indicator growth from the group of oscillators (RSI, AO, CCI, etc.), this indicates that the current value of the asset in the fix apiforex market has grown significantly, reaching its maximum in this zone, and you should expect a rollback.

The oversold zone operates exactly the opposite way. If the quotes decrease faster than the indicator’s decrease, then when the technical element’s boundary is reached, it is worth waiting for the damping of the pulse and the beginning of the corrective wave.

These zones are inherently the trade signals used by the trader. However, I would single out one more trading signal, which appears together with the oscillators movement. It’s about divergence.

Divergence is a technical element of analysis that indicates the end of the formed movement and the immediate transition to a new phase of the market. To put it simply, when the quotes decrease, and the indicator’svalue grows vice versa, one should expect the principle of quotes divergence to work and he should open a deal for purchase. But you need other analysis elements to help you find the entry point, because the divergence itself only gives a signal for a turn, and not a specific entry point. The oscillator from Bill Williams – Awesome Oscillator is the best way to determine the divergence, about which you can read more here – https://www.oanda.com/forex-trading/learn/forex-indicators/awesome-oscillator.

Waysofusingoscillators:

  • When the trend is attenuated. Oscillators indicate a possible end of the movement and thus contribute to go out before the turn. Thus, the application of this tool allows you to exit the transaction with the greatest benefit;
  • When the market is flown. If the market formed a lateral movement, then due to overbought and oversold zones, you can determine the entry points. However, one should take into account that the signal will be stronger if overbought and oversold will be at the border of the channel, and not in the middle. This will be an additional filter, which will help fix api trader to enter the position more profitably.

As you can see, the indicator data group allows both to find the entry and exit point. I do not emphasize that oscillators are a “magic wand” for a trader, but this is an excellent tool that allows you to increase your trading result. Personally, I use a technical indicator AO in my trade to determine the divergence, as well as to look for Elliott Wave Markup. Given all the simplicity and efficiency of the oscillators, these elements can be implemented in an algorithmic approach (http://forexzzz.com/product/forex-zzz-lock-arbitrage/), to automate the result.