Algorithmic trading in the foreign exchange market

The automatic approach to trading operations has been popular among the fix api traders for more than a year. New methods and approaches to implementation appear on the market, and every day, they become more and more. It is clear that out of all this variety of algorithms, working strategies may be only 5-10% of the total mass. Thus, even the trading robots confirm the statistics that 90% of all market players lose their funds.

Anyway, I still believe that trading on the fix api forex market should be conducted speculatively. It is best to use trading robots in order to do this.

I suggest that we consider today the types of trading robots for automatic fix api trading. Especially those that should be bypassed and those that are worthy of your attention.

Let’s start with those algorithmic techniques that I would not entrust my capital.

  1. Grid robots. This kind of robots has a feature, which consists in the fact that this group of algorithms is based on mathematical approaches. Grid robots very rarely trade on technical indicators. The logic of their work is “sutured” by a program code that looks at the price dynamics and in the event of a correction, it puts order in the opposite direction from the previous direction of the financial asset and through each step (a few points of profit) opens additional transaction into the same direction. Thus, the robot does not only trade against the trend, it also averages all the positions.
  2. The robots are based on the Martingale principle. They look very similar to the grid algorithms. Often, these two approaches are even combined into one program so that the robot can average transactions with a double volume. However, the logic of the system is a bit different. This principle should be added to the unprofitable deal with a double volume. This approach does not correspond to any classical (and correct!) methods of capital management.
  3. Scalping robots. In fact, there are automatic systems that are able to demonstrate a good profit among this group. However, the percentage of such robots in the market is very low, and if you create your robot with a working approach, this will be your author’s operating time (which I will write about below). These robots are very difficult to control. At the expense of the minimum position hold, which can be less than 5-10 seconds and also 2-3 points of profit, it is very difficult to understand the fact of draining. Fix api trader may not even guess initially that the deposit has begun to drain and regard the decline in the yield as a working drawdown.

Having dealt with those robots that need to be excluded from your field of interest, let’s look at those that you should pay attention to.

    1. Arbitrage robots. This group of trading robots is very similar to the scalping approach. However, the key difference is that the logic of these strategies is simple and understandable. You can more flexibly track transactions and manage the future result. To implement this approach, you need to have an account in two brokerage companies or a robot with access to fix api. Thus, the robot will compare the quotes between the two platforms and automatically open speculative transactions, while not having a risk as in case of scalping. Of course, it is very difficult to implement this approach to fix api forex. But there is ready-made software that can be already used today –
  1. Robots are based on the author’s approach. This group is interesting because the development of unique approaches, as a rule, brings better results than the use of the existing strategies. It is important to understand that not the new trading rules of the market are included into this category, but the unique combination of the already existing approaches.
  2. News robots. The same situation here is the same as with scalping strategies. Given the risks and returns that the news robots can show, I’m more inclined to their effectiveness for a simple reason – you can control the risks and understand whether the robot enters a drawdown or is it a deposit sink ( ). Since you will activate it at the time of the news background, the risk control remains with you.

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