Forex Trading and the Expert Advisors
If you are going to operate in Forex, sooner or later you will hear about the automatic trading systems of exchange. They are also called "robots", "expert advisors", and "automatic traders." It doesn't matter what we call them, they all work in similar ways. While the exact technology may vary from system to system, the way they work is essentially the same.
The automatic trading systems must be downloaded and installed in the operations platform of exchange and set it up, which will only take a couple of steps. The basic premise of these things is that they are essentially an "addition" to your negotiation platform. This allows you to install and uninstall them easily. Because of this, many traders have different systems that they use in a variety of market environments.
Automatic trading systems are divided into two basic categories: automatic and semi-automatic. The automatic systems perform operations for you, with no participation on your behalf. The semi-automatic systems simply give a signal or a suggestion of how much and in what form to trade a certain currency pairs.
Automatic systems of trading simply buy or sell based on a complex mathematical formula that sometimes tells the computer when to enter or exit the trade. The automatic trading systems simply do all of the work for you. It's very common for these systems to have their own hidden algorithms that you never see in order to make these decisions. The only thing they all have in common is that they are all mathematically based. Concealing the algorithms is a simple way to protect its intellectual property.
The semi-automatic system simply lets you know when it receives a signal to buy or sell. The system still has a hidden algorithm that we cannot see, but instead of carrying out the operation, a series of pop-up alerts are seen when the appropriate moment arrives for an operation. Then, you can decide whether or not to trade with the signal, which permits a major flexibility for the trader that does not exist in the category of automatic trading systems.
The majority of automatic trading systems are made for the platform MetaTrader4, now that it is the most popular platform. They are not made for other platforms like DealBookGFT360, Ninja Trader, Trade Station, and many others. Nevertheless, you will find an almost tireless source for the MT4 platform, since even the brokers that utilize other platforms often offer MT4 as well.
What News Or Information to Trade Forex?
When it comes to trading, whether it be Forex, Stocks or Daffodils, most traders have a plan that they base their own particular trading method on. With Forex trading, the majority of small retail traders like you and I, would probably use some sort of technical analysis, which is basically trading off the charts, using whatever indicators, patterns or set ups you choose. Or you may even just wing it and trade without anything on the charts. Still a method for some I guess.
Then there are traders that will ignore the charts and trade off and around major news releases, and do quite well from them. There is just about some sort of news released every day that will affect some currency in some way. The trick is to work out which way the news will affect the currencies you are trading.
The problem with the news releases, is that though they are just about all set a t a certain time, if you are not aware of them, they can catch you out big time. For example, the biggest news release is the Non Farm Payrolls figure which is released at 8.30am New York time on the first Friday of every month. Depending on the numbers that come out, this baby can move the market 100+ pips in a heartbeat, and if you are on the wrong side of it, lookout! Within 2 minutes, the market may have moved 200+ pips. It does happen! Imagine how you would feel if you just left the room to go to the little boys room without a stop in place, only to return 2 mins later to find your trade so far in the red, you will feel sick. Having said that, it could have also gone in your favour, but do you want to take that chance?
What is my point here. Be aware of the NEWS!
Now the good news is that there are plenty of free news calendars available on the internet, but the one I use can be found at Forex Factory on the following link:
It is very simple to use as you can modify it to suit your own requirements. For example if you only traded the EUR/USD and you were only concerned about news that had a medium or high impact on those currencies only, then you can set up the filter to show these news events only. Just click on the 'Filter' tab on the top right hand side above the title bar.
There is plenty of information on what the news is about and how it may affect the market, if you are interested. It is also set in your local time, so that makes it easier also. At the beginning of my trading day, I will open this site first and check for news releases that may affect the pairs I am trading. I will write these down in my journal, and if it is something big, I'll normally set an alarm to warn me about 10 mins prior. This will then put me in a position to either tighten up stops on open trades, close them or not enter a trade until the news release has past.
It is a good idea that you are aware of these news releases, especially if you are a short term trader, and make sure you have a plan in place if you are trading through them.
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