Automated Trading

[pringy]

Hey guys,

My eyes got a bit sore from scanning moneytec.com to learn more about automated trading platforms, so i thought i might try the locals instead!

Do any of you have any experience with setting up or investigating the use of automated trading platforms to trade forex?

It seems the two big names that i encounter is Metatrader and Tradestation, but it still remains a bit amibiguous on what they offer. I presume that they are more of a third party tool, where you still need to find a broker that would accept these third party tools.... although the Tradestation platform seems like a product of Tradestation Securities (tradestation.com) and you can open a brokerage account with them too.

I've currently got a mini account with Forex.com, and they seem to have a third party provider, Advanz.com, that utilises Tradestation to allow users to set up automated trading systems, with some additional charges.

Does anyone know much about Metatrader? Or to put it simply, if i have a trading system that i think can be applied as an automated strategy, how do i go about setting it up?

Thanks :D

[arco]

Hi Pringy

Sorry, unable to help with info on automated system.

arco

[Xerof]

Pringy,

FXCM appear to have something available. Looks like you need 100k USD as a start balance, be able to write your own system programme in Easylanguage and have Tradestation, but its a lead for you anyway.

This was the one and only site I checked out, so some of the other mainstream sites may have what you're after as well. I can tell you that Saxobank don't.....

http://www.fxcm.com/system-trading.jsp

Xerof

[pringy]

Thanks guys!

[Xerof]

Just a follow-up on Pringy's first request - I've also gained a pair of very sore eyes trawling through Money-tec, and its associate forum for automated trading www.strategybuilderfx.com over the summer.

There are some very interesting threads there, and some automated trading programs, notably the following, IMO

Hans123 simple breakout strategy
wma cross
Stratoblaster (just commenced as a derivative of the Tunnel method)

I've just downloaded Metatrader 4 and will be testing all of these strategies (and attempting to learn how to use the damn thing as well!)

My first impression is that I wouldn't rely on complete automation.

I struck a server outage last night (at their end), just at a crucial time which meant that the lack of data for 30 minutes completely buggered up all the indicators and automated trading entry levels.

Second impression is that there are a lot of 'amateurs' trying out new ideas, and not knowing too much about programming for Metatrader, so tread with care. I am.

I do think however, the breakout system of Hans123 works quite well, and would bring in a steady average of piparoonies as a background mechanical system - only problem is our timezone makes it almost impossible to handle fully.

The 'Bunnygirl' wma cross is also a very sound scalping system IMO, but involves a bit of personal judgement to hit the trigger sometimes.

But at the end of the day, I like what I see here at sharetrader;
- there's nowhere near as much to read
- there are no c.r.a.p posts
- there are no c.r.a.p. posters
- nobody is trying to sell you anything except honest opinions

Anyway I'll let you know how I get on - happy reading[8D][8D]

Xerof (Xeroff over on the uvver side, but haven't posted yet) ;);)

[pringy]

I actually spent quite a few months using Amibroker to backtest some strategies (Amibroker.com; of Russian origins, and you know they always provide value for money!), as i found their scripting quite easy to understand, very similar to Visual Basic. Note that I have a fairly basic understanding of programming, and relied heavily on "plugging".

I was sort of adamant that scalping was the way to go, and focused on a strategy using a 15 minute timeframe, based on moving averages, using the Bunnygirl WMAcross as a starting point. I also eventually included a breakout system. But the key was having the right filters, and i used DMI as the main filter and a price filter, and also a stoploss spread that reduces when conditions become unfavourable.

I was much better with Excel, so what i did was output all the trades from Amibroker and calculated the profit/loss, and after much fidgeting around optimising the values, i came out with a 6.5 pips profit per trade, but a miserable 113 pips per month, going LONG only on EURUSD, 44% of the trades winners. And that is net profit, spread taken into account. So that's potentially about 200 pips long and short.

Despite the monster effort i placed into that, it's actually a pretty simple scalping system, where the average trade lasts 3 hours. But there is also an additional cost to running the automated system, where Advanz was quoting US 50 cents per 1 mini lot trip, but 50 free round trips a month. Setup fee of US300, and monthly fee of US150.

But i abandoned it.. I've sorted just started a career in engineering (should have done finance!!), and I didn't really have much capital to risk, but mainly what put me off, was some ready-to-go systems that Advanz were selling were offering up to 12 pips per trade, but also a miserable 300 pips per month?

So i'm back to more practical medium term trading, using the Tunnel Method as a backbone:

http://www.freewebs.com/mswilson/documents/1hrTunnelMethod.htm

It worked for a while, when the market was nice and cyclic in March and April, but absolutely got shafted near the top of the EURUSD run, cause of internet instability, not looking at the big picture, sickness and overextending my trades... argh.. poor excuses.. basically a wipeout due to poor discipline and high ego... [V]

Anyways, lesson learnt, but what i'm really lacking now is forecasting ability, in terms of Elliot waves. I've done some reading on it, but constantly got put off due to it's subjectivity.. I wonder if anyone can offer some insight into that? Or point me in the right direction..

Retracement has always been my main enemy, and i've been relying on Fib retracements and projections.

I found the Tunnel Method useful in placing into perspective the main market direction, profit taking levels, but the main weakness is the chop-chop around the tunnel... which brings into point, the real secret of success of Forex is to know when NOT to trade... and money management. I will have to focus on that for now, cause somehow, i starting to believe that there is a no ULTIMATE FORMULA..

BUT, some automation can be highly beneficial, i.e. you get an alert warning that there is a potential trade, and then u can make a conscious decision to enter the trade, and having a backtested stoploss system that will maximise your profit...