Trading robots in trading: how to choose the optimal algorithm

Each trader certainly wants to optimize his set of rules and the principle of trading (or simply speaking the trading system) to improve the efficiency of work on it and, of course, to improve the financial result. In turn, this desire becomes the reason for the appearance of trading scripts, trading panels and algorithmic trading strategies.

Speaking of the latter kind, more and more fix api traders create trading robots based on their strategy. Of course, if the strategy in manual mode demonstrates stable profitability indicators, and have a positive mathematical expectation, the robot will be able to increase the capital faster than the manager. The 24-hour work schedule, as well as the depth and analysis completeness will contribute to the maximum possible increase of the deposit.

What to do in the event that the personal trading strategy shows weak dynamics of profitability or a negative result and the trader does not have anything to automate? Of course, one of the options is to use a third-party algorithm to work on the fix apiforex market. Thus, to buy a trading robot.

However, the following difficulty arises: how to choose a trading robot, if it is based on a third-party strategy that you do not know?

To find the answer to this question, I propose the following parameters, which should be considered when buying a trader software:

1.The logic of the trading robot. Even if you do not know the strategy by which the algorithm works, then search for a similar strategy on the Internet. Perhaps, you will find some reviews or descriptions. Moreover, you can find fix api traders who apply it in their work. Ask them about its efficiency and profitability of use. Most robots are written on the principles that are available even on the Internet.

2. Trading robot type. Also, after determining the work logic, I recommend identifying the robot’s type. In the settings of the software, this can be indicated, but if you understand the logic of its work, you can certainly already know about it. I will highlight the key types of the trading robots:

• Trend robots;

• Gridrobots;

• Scalpingsrobots;

Fix api arbitration;

• Martingale.

I strongly recommend to bypass the last view. All the rest have already confirmed their profitability and ability to increase the capital (Blog link 0128_ENG_blog).

3. Parameters that can be configured. Like any other program, the trading robot must be configured as a contract manager. So, in its settings there should be an opportunity to specify the deposit amount, the maximum risk indicators, the volume of the trade operation, if necessary, the currency pairs for trading. I recommend you to contact the developer and, if necessary, to add external parameters to the robot to adjust its algorithm to your investment tools.

4. Results of the historical testing (or testing on real accounts). Undoubtedly, no one will buy a trading robot that does not have a history of trading. Otherwise, this purchase will become like a cat in a sack. And of course, most developers attach the result in the form of a curve from the strategy tester. But even more qualitative selection would be to see the results of the current customers.

5. Trade indicators. Together with the analysis of historical profitability, attention should be paid to trade indicators, namely the following parameters:

• Mathematical expectation (this indicator should show a positive result. A negative MO indicates a loss-making trading strategy);

• Recovery factor (how “fast” the robot gets out of the drawdown);

• The loss-making and profitable trades ratio;

• Average loss-making and average profitable transaction.

Optimization of the trading strategy allows you to increase the trading result of the trader, but at the same time it should be clear to which algorithm you can trust your capital. I hope, the parameters given above will contribute to the selection of the most qualitatively software in your fix api trading.

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