You may find many trading systems on the Internet that are ready to work on FIX API Forex. However, it should be understood that there is no such thing as a free lunch. Most of these “working systems” are nothing more than a set of trading rules and principles that do not guarantee results.
Today I will make a small FIX API tutorial, in which I will tell you what you should look for when searching for simple trading systems.
First, you need to understand what elements should a simple trading strategy include:
- Working timeframe. A trading system must necessarily have a work interval in its description. For example, scalping systems generally conduct the analysis on the M1-M5 timeframe. Fix api arbitration systems perform operations in a fraction of a second. And trend-based systems have a broad open position hold period and analyse within the H1-D1. At first glance this is a trivial method, but it’s still valid. The result of a system designed for FIX API trading on D1 period, will be significantly different from trading on the M5.
- List of trading instruments. Also a simple but valid option. Some trading strategies are developed specifically for a particular asset or a small group of assets. As with the first parameter, if the system was made for the EUR/USD currency pair, trading on USD/CAD (or any other assets) does not guarantee the result.
- Analysis tool set. Of course, the description of the system should include the full set of analysis methods, namely the technical indicators, turning figures or support/resistance levels. This depends directly on the trading strategy. Each system on the Internet has this parameter (while 90% of systems consist only of it). But here it is important to understand that the indicators in the set must be mutually reinforcing. That is, the system should include both trend movement indicators, and the oscillator. If you already have some trading experience, you can easily determine if this condition is satisfied in the strategy.
- The parameters of risk and money management. Each system must have both entry and exit points. That is, the algorithm that shows when to open a transaction according to a signal (as in parameter 3), when to close it, and what volume to choose for a trade operation. Effective capital management helps to avoid major drawdowns and preserve the invested capital.
- Availability of process automation. It is not required, but if the system is capable to work in an algorithmic mode, then it will testify the reliability of the selected algorithm.
These are the key parameters that need to be included in a simple strategy for working on FIX API Forex market. With these parameters, you can filter out the selected strategies.
For example, trading systems, which are based on the intersection of moving averages, provide market entry parameters, however, is not always clear when to close the deal and what risk level to set. Strategies based on the candle (price action) analysis, describe the position entry and exit more accurately, however, only some of them include risk management options. Leveled strategies are much easier from this point of view. The levels already include the timeframe on which you’ll work, the instrument set, and of course market entry and exit points. Scalping strategies also are easy to understand and include an extended list of necessary parameters.
Here I’ve tried to outline the key points that should be addressed in the search for simple trading systems. FIX API MT4 trading terminal includes many tools to conduct effective analysis, to which you should also pay attention when choosing strategies. The main thing to remember: the trading system should be simple and understandable for you!