Creat Your Own Automated Trading SystemTrading systems are the rules of the game in the financial markets. Traders use it to determine their current market position and to strategize their next trading move. In building and utilizing trading systems help traders to come up with measurable and consistent market advantages with little or no risk at all. The ideal trader acts like a robot and the trading system, its program: it executes the trade systematically. Given the right and updated information about the trade market and the factors that may influence its trend, the trading system puts together the relevant knowledge in order to make the right trading decisions. Seeing the advantage of a "robot" trader, trading systems were translated into trading computer programs, resulting in the development of automated trading systems. Automated trading systems (ATS) are created by translating trading system rules into computer codes. The computer runs those rules through the trading software and maps out the next course of action in the market. When the best trading strategy is mapped out, the trade is immediately forwarded to the broker. Most trading programs presently available support automated trading systems. However, there are a few divergences. Some programs automatically draw market moves and place the trades directly with the broker. Others will automatically generate trades but would require that the trades be manually placed with the trader. The use of ATS has both advantages and disadvantages. On the positive side, an ATS helps built consistency and objectivity in making market moves and takes out busy work out of trading, allowing the trader to improve further his market strategies and refine his money management rules. When the trading system works profitably well, it can go on by itself until it breaks or when a major market change occurs. On the other hand, if a trading system is not coded properly and tested against prevailing market conditions, large trade losses can happen very quickly. Also, some trading rules cannot be translated into computer code, making it hard to create an accurate and foolproof automated system. But the ATS is no money making machine. A "completely automatic" trading system always involves a big leap of faith. How an ATS would eventually work would still, in many ways, reflect the market hindsight of the developer or worst, manipulated in order to stick to a spectacular trade record, only to end up with major losses when the manipulation runs out of hand. In the market, as in real life, instability is something that remains constant. This is why the efficiency of an ATS works with the up-to-date input of information and other variables of market activity. How effective an ATS will be would always depend on how the trading rules are defined and how efficiently are the rules translated into a code that the computer will easily understand. It is also highly important that an ATS is tested enough to make sure that it performs well and how it can be put into best use. With the right automated forex trading systems, the risk that one decisively takes as the first step in market trading allows him to finally reap the deserved reward in financial profits. |