Automated Forex Systems Trading - How to Start Automated Trading
As a trader if you are looking to automate your Forex trading and come up with automated forex systems, you might be doing some How to Start automated trading. The example below shows a currency pair chart along with where an automated system is supposed to generate signals and which signals it should generate.
Automated Forex Systems
The above example is a manual system that uses the rules below to generate trade signals.
Long Entry
Both Moving averages moving upwards
RSI above 50
Both Stochastics going upwards
Both Moving averages moving downwards
RSI below 50
Both Stochastics going downwards
These signals in the above example are displayed with the red and blue lines.
To automate this system, all you have to do is to use the above trading rules to write the code for your automated forex systems.
So to automate a buy signal, your automated system will use this pseudo code, but you will have to program it using the coding language of your trading platform. For Example you will have to code it in MQL4 coding language, or what is basically C++ programming language.
Pseudo-code
If 7 SMA is greater than 5 SMA and RSI is greater than 50 and stochastic %D period is greater than stochastic %K period;
then Signal = Buy;
To automate the sell signal
Pseudo-code
If 7 SMA is less than 5 SMA and RSI is less than 50 and stochastic %D period is less than stochastic %K period;
then Signal = Sell;
To automate the above system all you have to do is to translate the above pseudo code to your trading platform programming language or alternatively ask traders in forums such as MQL4 community to translate it for you to a program or pay a programmer to do it for you.
If you can have a programmer to program it with the red and blue line showing when the trading signals are generated like in the above screenshot the better for you, because the system will show where the signals are getting generated and you can even look at how it would have historically traded the market on your chart.
The complete Forex system along with the rules is shown below, the above version of this system has been simplified for programming purposes.
Learn MQL4 Expert Advisors Forex Programming and Coding
When it comes to Automated Trading then traders need to learn a bit of programming to make their own automated forex systems or they can have their system coded or programmed by other traders such as those you find on online communities specifically the MQL5 community.
The next thing to do is to test extensively using a program such as the MT4 Strategy Tester. This provides an environment where as a trader you can test your automated system on any currency pair and on any time frame you choose either using ticks or other different parameters that you want your system to use.
The next thing you need to do is to refine your system so that it makes a good profit on your account. This automated system should be tested on a practice demo account.
After you test your automated forex systems on a demo account then to trade the market you need to hire a VPS - Virtual Private Server , that can run your EA 24-7, the EA cannot run on your computer 24-7 and if it can there might be interruptions on the internet connection. This is why you need to hire a VPS to host your Expert Advisor on. A VPS costs anything between $30 - $100 dollars per month even more depending on what VPS specifications you want. The cost will depend on the memory of the server, the disk space you want and the bandwidth that your system will take up when placing trades. So the more the trades the more bandwidth you require.
If your system is profitable enough to pay for VPS hosting fees then you can host it with a currency broker that will provide you with this VPS hosting and then open an account with the broker where it will trade and place trades. Alternatively there are many companies that offer VPS for forex EA hosting as a service on its own. As a trader once you buy VPS Hosting, then the hosting company will show you how to install the MetaTrader 4 of your broker on this VPS and then install your Expert Advisor and how to login remotely to this VPS server, from your computer and change any settings of your Expert advisors. The VPS server is a specialized computer that runs 24-7 without need to shut it down after a few hours.
On the VPS, your VPS provider will pre install MetaTrader 4 platform from your broker, and you will connect to the server remotely using the Remote Desktop Protocol and that way you will have access to the server, the trading platform and your Expert Advisors. The VPS will run 24-7 and you can access it anytime from anywhere.
If your automated forex systems requires to be online throughout the week and then VPS should be a good option, your EA will be online 24-7, VPS machines don't require to shut down and can run continuously 24-7.
