Automated Trading Algorithms - How to Start Automated Trading
As a trader if you are looking to automate your Forex trading and trade with automated algorithms, 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.
Forex trading with Automated Trading Algorithms
The above examples 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 upward
Short Entry
Both Moving averages heading downwards
RSI below 50
Both Stochastics going downwards
These signals in above examples are shown with the red & blue-lines.
To automate this system & come up with an automated trading algorithm, all you've to do is to use the above trading rules to write down the code for your automated system.
So to automate a buy signal, your automated trading algorithm will use this pseudo code, but you'll have to program it using the programming language of your trading platform. For Example you'll have to code it in MQL4 coding language, or what is basically C + + programming language.
Pseudo-code for automated trading algorithms
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 Forex Signal
Pseudo-code for automated trading algorithms
If 7 SMA is less than 5 SMA and RSI is less than 50 & 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 above pseudo code to your trading software coding language or alternatively request traders in forums such as MQL4 CodeBase community to translate it for you in to a system or hire a programmer to do it for you.
If you can have a programmer to program it with red & blue line showing when trading signals are generated like in above screen shot the better for you, because the system will show where the trading signals are getting generated & you can even look at how it would have historically traded the market on your chart.
The complete Forex system along with rules is illustrated below, the above version of this system has been simplified for programming purposes.
Learn MQL4 Expert-Advisors Forex Programming & Coding
When it comes to Automated Trading and automated trading algorithms - traders need to learn a bit of coding to make their own automated programs or they can have their system coded or programmed by other online traders such as those you find on online communities specific the MQL5 community.
Next thing to do is to test thoroughly 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 timeframe you choose either using ticks or other different parameters you want your system to use.
Next thing you need to do is to refine your automated trading algorithm so that it makes a good profit on your trading account. This automated system should be tested on a practice practice account.
After you test it out on a Forex demo account then to trade the market you need to hire a VPS - Virtual Private Server , that can run your Expert Advisor 24-7, Expert Advisor cannot run on your desktop computer 24-7 & if it can there may be interruptions on inter-net connection. This is why you need to hire a VPS to host your EA 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 memory of the server, disk space you want & band width which your system will take up when placing trades. So the more the trades the more bandwidth you require.
If your automated algorithm is profitable enough to pay for VPS for forex EA 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'll trade and place trades. Alternatively there are many other companies that provide VPS for forex Expert-Advisor 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 MetaTrader 4 of your broker on this VPS and then install your Expert Advisor & how to log in remotely to this VPS server, from your PC Desktop computer and change any settings of your EAs. The VPS server is a specialized computer which runs 24.7 without need to shut it down after a few hours.
On the VPS, your VPS provider will pre install MT4 platform from your broker, & you'll connect to the server remotely using the Remote Desktop Protocol & that way you'll have access to server, the trading software & your EAs. VPS will run 24-7 and you as a trader can use access it anytime from anywhere.
If your automated trading algorithms requires to be online throughout the week & then VPS should be a good option, your EA will be online 24 7, VPS machines do not require to shut down & can run continuously 24 7.
