Methods of trading strategy automation


The key point in trade optimization, which I wrote about earlier in my materials, is the transformation of manual trading strategy into a full-fledged robot. The algorithmic approach will allow you to simplify the process of tracking the trading signals and will increase the timeframe for fix api trading, which together will result in a higher trading result. The trading robot is the main type for trading strategy automation http://forexzzz.com/product/forex-zzz-lock-arbitrage/ , but there are additional types of trading tools that can be further improved by making them automated. These are robots, scripts, and automatic indicators.

I suggest starting with the simplest one, i.e. indicators. The main difference here is that automatic indicators do not simply reflect the current situation on the market, but also point at the entry and exit points from the positions. Thus, these indicators report to you in the form of a text message or a special alert about the presence of a trading signal. In this case, you do not need to separately view all the charts in search for profitable trading speculations. It is enough to just wait for an alert from the indicator and only then to open the schedule. After this, through your professional opinion, you can decide whether to buy or sell a financial asset. If you develop author technical indicators, make sure that they can be combined with other elements of your trading strategy.

How the indicator can be automated?

It is enough to take a standard indicator and simply add an alert condition to it – alert (https://www.metatrader4.com/en/trading-platform/help/overview/terminal/terminal_alerts ). This can be done by programmers who have a knowledge of the MQL language. But there are so many examples on the Internet, and the development environment itself in fix api MT4 also has so many examples that it will not be difficult for you to realize the idea yourself.

The next group that can be automated is scripts. I would even say this: the scripts without automation are simply unreal. Therefore, if your strategy provides for closing positions on the fact of candle closing, it is enough to write a script that automates this process and will not require constant monitoring of the quotes schedule. An automatic risk control is also a popular type of scripts, which is implemented in the form of a hint how much risk is still available in the context of the day or month. If you reach these parameters, then the script closes all your operations and limits the fix api trading for a certain time period. Also, there are scripts that notify you of the fact of a breakdown or rebound level, or of reaching the Fibonacci level, the operation of stop loss or take profit, and so on. It all depends on your trading strategy for the fix api forex market.

How the trading script can be automated?

It is very difficult to implement scripts independently, because these elements of automatic analysis are not built into the trading terminals. Due to their uniqueness, there are also a limited number of examples on the Internet. Therefore, if you do not have enough knowledge in programming, it’s best to turn to professionals.

And of course, trading automation in the financial market can be achieved by algorithmizing the entire process, i.e. by creating a trading robot, as I wrote at the beginning of the article. You lay down all the necessary risk parameters, money management, blocks of opening and closing the transaction, as well as supporting open positions. Again, this process depends entirely on your trading strategy.

How to create a trading robot?

At first glance, this is a complex process, but this is not always the case. Today, many special sites have been created that allow using a designer to create full-fledged software for automation of any trading strategy. With the help of these resources, you can also create in the same way block code that will display all the conditions and parameters of the trading strategy for the fix api forex. And certainly, the option to entrust the solution of this issue to the developers and programmers is also topical here.

What are the patterns in trading and how to interpret their trading signals?


Even before the computerization of the fix api trading, the stock market players conducted special notes and analyzed directly the board of quotes. When there were those who showed price data in the form of graphs, everyone treated them skeptically. I think you agree that the market is cyclical and moves in certain phases, which are repeated over and over again. It is precisely these phases that were looked for earlier and continue to be searched today. However, how to understand the current trend, and how it is consistent with the past dynamics? For this, patterns have been developed that indicate exactly the kind of regularity in the movement of prices in the financial market.

The pattern is a technical analysis tool that is used without auxiliary computer elements. That’s why they are so popular in the application of the Price Action strategy. Since it is a certain pattern, they can be combined into one group, which will indicate the position of the price at a given moment with the subsequent trend reversal or continuation, depending on the technical signal. To put it simply, the pattern is a certain dynamics of candle combinations, which on historical data has already proved its effectiveness many times.

In order to understand to what kind of patterns the financial market is moving, they can be divided into several groups:

  1. Trend continuation pattern (triangle, flag, pennant, etc.);
  2. Turning patterns (double bottom/top, “head of the shoulders”, etc.);
  3. Candle combinations (harami, pin bars, shooting star/hammer, etc.).

Given these groups, you can identify also those signals that they are able to demonstrate. Thus, it is possible to identically identify two types of trading signals: trend continuation and its reversal.

The first group is based on the fact that the pattern, for example “flag”, demonstrates a strong impulse and after the set of positions, it is necessary to open an additional deal in case of breakdown of the generated local maximum. With this approach, you will have a short stop loss, which will be installed under the flag base, as well as a long take impulse-sized. If you use a “double bottom” or “head and shoulders,” the zone of stop loss is the last shoulder, and the take profit zone size from the maximum of the “head” to the base of the pattern.

The second group will be based on work against the trend. This approach should be carried out with the opening of trading operations in the fix api forex market of minimal amounts. After all, you will enter into a breakdown of the trend, and if the reversal does not happen, then there will be a fixation of the minimum risk. But if the pattern works, it will allow you to go at the very beginning of the generated movement. Thus, the stop loss level will be exhibited in just one or two candles. Thus, it will be short. But the take profit level here is not limited and can be exposed at the next level of resistance. This approach allows you to trade with the SL to TP ratio approximately 1 to 5 or more.

It is also worth noting that the use of patterns in the trading has several key advantages:

  1. The whole market trades based on these elements, hence, the reliability of the signal is higher;
  2. They serve as an auxiliary factor for determining the purpose of the movement;
  3. Majority have a standard ratio of profit to loss of 4 to 1.

As you can see, there are quite a few different trading signals that can be found on the chart without additional technical and computer elements. In turn, this allows each fix api trader to add patterns to his trading strategy as an additional signal, because such an approach will not go against your trading strategies.

What trading indicators displays the reliability of trading signals


If you are already trading in the financial market for more than a year, then I’m more than sure that your profit and current yield are very reliably pre-calibrated, aren’t you? Everyone sooner or later comes to the fact that you need to direct your capital not only to your trading, but also to the other sources of passive income. This will be the most reliable option. But where the trader invests?

Today, we will consider such a kind of connection of investments to another manager either through the service of copying the trading signals or through trust management –https://fxsocialnet.com/. In fact, it does not matter what principle is used, after all, selection of the manager is carried out according to the same parameters, which we will consider below. I miss such traditional options as investments in bonds, real estate, leasing, bank deposits and so on. Let’s consider an interesting and profitable direction, which requires certain knowledge so that the investment capital will increase, and not be lost.

Well, first of all, I want to determine that connecting to another manager can be quite difficult for you from a moral point of view, because you are used to conduct fix api trading yourself. But if you can overcome yourself, then diversification will improve the result, and this is the main thing.

To choose the most optimal fix api trader, I recommend paying attention to the following moments of his trading and those trading signals that he provides:

  1. Work algorithm. It is necessary to know whether the trader trades independently or whether the work is done by a trading robot. In this case, it will be easier to simply purchase program and connect it to your trading account, which will help your control the trading. If the trading is in a manual mode, then ask for additional information on its strategy: on what rules and principles it is based; is it intended for trading in the fix apiforex market and so on.
  2. The results of work on a real account for a long period of time. I think everything is clear here – the longer, the better.
  3. Do not rush to look at the profitability indicators in the results. They should be in the last place. Pay attention to the capital that the trader ran and compare it with the mathematical expectation. If the mathematical expectation is less than 2% of the capital, it means that trading is seen as speculative and in the context of long-term investment, the profitability index may decrease.
  4. Next point, pay attention to the profit factor. This indicator will allow you to understand with what profit and risk ratio the manager trades. I recommend you to pay attention to the value of this indicator, and that its value is at least 3. This will indicate that the trader uses the ratio of Stop Loss to Take Profit level of at least 1 to 3 (conditionally).
  5. Also, pay attention to the recovery factor. If it has more than 10, which is exactly what I recommend, it means that the fix api trader can quickly get out of the drawdown. If less than 10, then in the event of a decrease in yield, the period of return to these values may drag on for a longer time.
  6. As a last point, I recommend to analyze the ratio of the average profit and the average losing trade. It will also allow you to confirm how correctly the rules of money management are used, because it is not so bad if there are more unprofitable transactions. The main thing is that the ratio of profit in points was a positive value. Then, the mathematical expectation and all other indicators will also show growth.

I hope that after reading this material, you will be able to more thoroughly determine the most qualitative manager based on his trading signals.

ATR Indicator as a tool for determining the Stop Loss level


Probably everyone had situations in which the market took our Stop Loss orders and left in the right direction, isn’t it? And I’m more than sure that the newcomers accuse fix api forex brokers about this, and the more experienced ones accuse themselves, while the professionals write it off on the likely scenarios of their trading strategy. But whoever you are, I’m offering you today to consider one of the best quality tools for determining the exit level from a lossy position, namely ATR https://www.metatrader5.com/en/terminal/help/indicators/oscillators/atr

I want to note at once that ATR was not originally created to determine the zones of fixing losses using stop loss. This indicator was created to determine the volatility of the market. Thus, ATR allows you to understand what is the current condition of the “turbulent” market or whether it is in the side channel. So, if the indicator value tends to a maximum, then we can assume that the market has increased volatility that goes beyond the normal framework in the past, and therefore we should expect a rollback or a new trend. If the value of the indicator is at the minimum, then this movement should be interpreted as a phase of the calm market.

ATR in combination with other technical indicators.

As you already understood, ATR also allows you to determine the trend. Thus, the very fact of the breakthrough, which makes it possible for the fix api trader to enter at the very beginning. And to do this correctly, you should also combine it with the values ​​of trend indicators. The MA technical indicator is best suited for this role. I recommend using the Moving Average with a period of 100, and the ATR with a period of 14. Then, the ATR indicator will show a line with a long period, the breakdown of which will indicate increased volatility and, at the same time, probable change of the trend. So, if the ATR values ​​are above MA 100, then the market is in a volatile phase and the market is rebuilt. If the value is lower, then the market is calm and follows the trend or moves in the side channel. As you can see, the combination of ATR and MA has an additional filter, rather than just using a single indicator.

But, how to determine the Stop Loss level according to ATR?

To do this, it should be noted that ATR displays volatility in points. Thus, if you have a trading signal (1sforexsignals.com ) to open trading positions, you can define Stop Loss at the moment of entry: the current value of the volatility indicator should be multiplied by a certain constant, which is often used at least 3 (sometimes 2-2.5).

For example, you know that according to ATR volatility on the daily chart for the EUUSD currency pair in the fix api forex market is 40 points. Thus, you set the stop loss at 120 points from the opening price (40*3, where 3 is a constant). This allows you to maintain the position if the market will have increased volatility. But if there is a reversal in the market associated with increased volatility, this will allow you to exit from the position with minimal losses.

Thus, ATR does not depend on the type and methodology of your trading strategy. Its application has already been proved by statistical data. If you still do not have an algorithm to exit from the trading positions for the stop loss level, then I personally advise you to start with this technical indicator. I also use it as a means of closing positions for the greatest volatility of the market. But I set the initial stop level after the other indicators and signals work to turn if I have already been in the position on this financial instrument.

 

What nuances should I pay attention to when buying trading software?


Earlier, I already wrote that I strongly recommend everyone to create their own trading robot based on the current trading strategy. This approach will allow the fix api trader to passively earn on the market without additional interventions in the process of analyzing and forecasting the financial asset. But what if you do not have a clear algorithm or you do not want to learn additionally a programming language for writing a program? Then, you have an opportunity to turn to the traditional method of determining the reliability of the program, since in this case, you will acquire third-party software and in the future trust it your investment capital.

That is why the choice of reliable software for trading in the fix apiforex market should occur on the basis of certain indicators that we will consider today.

  1. The internal structure of the robot and its methodology. Initially, I recommend looking at the logic of the algorithm itself. Thus, on the basis of which strategy or principle it is arranged. If I were you, I would initially avoid martingale and grid robots, as their results have increased risks. Among those that can be used this may be fix api arbitration (http://forexzzz.com/product/zzz-2-leg-arbitrage/), scalping, trend and based on levels. Ask developers for a detailed description of the work principles, so that they can be compared with the test results.
  2. Results of back-testing. When you already know the essence and principle of the trading robot, all you need to do is to compare these two values – the paper version with the real one. And if at least one parameter is rejected, such software should not be used. If the historical indicators are true and all the rules embedded in the robot have been met, then we can proceed to the third point.
  3. Trading on real trading accounts. Historical results – this is of course great, but since you acquire third-party software, it is better to make sure that it is able to conduct the same fix api trading in the real market, too. If the developer has customers, this will only be a plus. Or, at least, find out whether the developer himself has entrusted his capital to this software.
  4. Trading indicators and work of the trading algorithm. One of the key stages is the analysis of the robot’strading activity. You can learn more about it by analyzing the indicators in the form of factor profit, mathematical expectation, recovery factor, Sharpe ratio, the ratio of profitable and unprofitable positions, and so on. This will give a more complete picture of how the robot works and what it is worth to expect from it. Indicators of a factor profit that is less than 2 indicates that the algorithm is speculative and can have a changeable success.
  5. The possibility of trading through a financial protocol. This is as in addition to the previous items. Trading through the fix api can be a filter of speculative algorithms, and can also indicate that the robot does not depend only on one trading account, but it is able to trade on any data.In the case of fix api, these data will be more relevant and correct, which in potential will increase the results of fix api trading(http://forexrobotshub.com/2017/07/18/fix-api-trading-2/).

If you take into account all the indicators listed above, you can choose a reliable algorithm for passive income. Moreover, if you know what to expect from a robot, you can optimize it for the necessary risk parameters and profitability. Considering the fact that the robot is constantly analyzing and controlling all the risk parameters, algorithm will become an additional tool in your action on the market.

Arbitrage of price delays


Each trader considers different tools for analyzing and forecasting the future value of a financial asset effective. For some people, this is the use of fundamental data, for others- the opinion of key players in the market, for others- using technical elements, and for some – an algorithmic approach. Agree that you also have a similar tool on the basis of which the trading strategy is built, isn’t it? And if the answer to this question is positive, this is wonderful. But if negative, it is worthwhile to think about the systematization of the fix api process on the financial market.

Today, I will consider a very popular technique in the fix api forex market, which is known to a limited number of exchange speculators and is applied even less in their trade. For me personally, this is an excellent source of passive income, which I combine with my manual trading. It is an arbitration algorithm.

Arbitrage is a kind of speculative opening of trading positions in the financial market, with the goal of fixing profits based on exchange rate discrepancies between the same asset, but on different platforms. If we are talking about the fix apiforex market, the stock exchanges in this case are brokerage companies that set mark-ups or delays for their customers. On the contrary, arbitration software (http://forexzzz.com/product/zzz-latency-robot/) allows you to trade on these negative moments, which made it so popular in the circles of professional traders and unwanted for the fixapi brokerage companies.

Price delays: what is it and how to turn them into benefits?

Price delays occur between two brokerage companies. This phenomenon can often be seen between a prime broker and an ordinary brokerage company, where the price delay can be fractions of a second, and is not visible to the armed eye. However, for an algorithmic approach and trading robots, this is more than enough to complete a trading operation.

HFTtrading itself began with this – with the difference in the value of assets on different exchanges.

If the fix api trader has a robot (http://forexrobotsreview.us/2017/07/19/trading-robots/), which is able to trade at the time of delays, it will be enough to open an account with a slower broker and connect a quick one to reconcile the actual data. And when there will be an arbitration situation, i.e. in the prime broker, the price will be higher or lower than the quotations of the broker, on which the account is opened – the robot will make the transaction in the direction of delay.

To implement such a simple algorithm, special programs are created that trade using afix api protocol. This allows you to implement the arbitration principle in one algorithm and even on one platform. If the broker provides the opportunity to connect to fix api, then the trader can use this to receive the current data from the financial protocol FiX, and trade on a simple account.

Advantages of this approach:

  • It allows you to increase the number of speculative positions, making a large amount of trading operations (for some brokers this is important);
  • The speculative algorithm has practically a zero risk parameter;
  • It allows you passively to increase profitability in the fix apiforex market.

Disadvantages of this approach:

  • Some brokers prohibit this approach, but there is software, which allows to circumvent these prohibitions;
  • In view of the fact that arbitrage will be conducted on the side of a slower broker, this indicates its low level of reliability, which can cause additional risks for the trader.

The arbitration of exchange rate delays allows the trader to actively trade in the financial market without further analysis of the financial asset. This approach, with the help of the trading robots, can become an additional tool for manual trading, or an additional trading account that will compete with your trading. Personally, I use the second approach.

The classical arbitrage in the forex market


There are loads of instruments for the financial market analysis in the fix api forex market. They allow conducting a stable trading. Both algorithmic and manual strategies can be referred to these instruments. However, today we are going to examine one of the very first ways to commit speculative positions, namely the classical arbitration approach.

The arbitrage is a kind of trading, in which all analysis is reduced to determining exchange rate differences of the same financial asset, but on different stock exchanges. It is not based on the analysis of the historical movement. This approach allows you to conduct risk-free trading and accumulate a large percentage of return at the same time.

Considering the classical arbitrage, it is crucial to understand that there are several types of it, which can be applied to the currency market.

  • Fix api 2-leg Arbitrage;
  • Fix api Latency Arbitrage;
  • Triangle Arbitrage.

So, this is the first type that can be attributed to the classical forms. This principle was used in the stock market when the value of the same financial asset was significantly different on different exchanges (for example, in London and Japan).Considering the foreign exchange market, fix api arbitrage has become a reality. It happened because the multiple brokerage companies which act as these different platforms had opened.

Let’s look at the example in order to understand the algorithm of classical arbitrage in more detail.

The value of the currency pair USD/CHF in one broker is 1.0215, while on the other platform it is 1.0235. Thus, the discrepancy between the same currency pair is 20 points. In this situation fix api trader can make an arbitrage trading operation, which will consist in buying USD/CHF from the first broker and selling on the side of the second one. When this discrepancy would decrease to 10 points, the manager will close both positions. Let’s imagine that the value of the currency pair will be 1.0278 and 1.0288, respectively. Then, according to the first operation the profit will be fixed at a rate of 63 points, and according to the second one the loss would be fixated at a rate of -53 points. The total financial result for the two operations will be +10 points, which the trader had received without any risks.

The algorithm of the arbitrage methodology is quite simple. However, it is complicated, while committing trading operations manually. It is because the forex market is the most volatile one and the ordinary person finds it very hard to follow its dynamic, especially if we are talking about the analysis of two different accounts and financial assetsat brokerage firms.

That is why particularly this type is amenable to algorithmization and has become one of the first systems that were implemented in HFT trading. Trading robots written on the arbitration strategy are in a great demand among various participants of the exchange trade (http://forexzzz.com/product/forex-zzz-lock-arbitrage/).

So, the algorithmic approach in arbitrage trading allows:

  • Conducting a continuous analysis of financial assets on various stock exchanges (fix api forex brokerage companies);
  • Increasing the profitability of investment capital while having minimum or zero risk parameters;
  • Usingfix api to get the most up-to-date and timely data. It allows you to increase the profit potential and thus deprives you of the need to use the server and open accounts in “fast” broker companies;
  • Using the faster and the slower broker for the manual trading or trade via fix api, which is suitable for arbitrage trading;
  • This algorithm is not based on the graphical analysis (https://freshforex.com/training/interactive/forecast/graph-analysis/?switch_lang&_ga=2.29721151.1864029250.1507551596-290512134.1507551596), and therefore can easily be combined with the manager’s manual strategy in the currency market, regardless of its type and internal algorithm of actions.

What do you need to pay attention to when choosing a brokerage company?


The trader should be able to cope with all difficulties related to the financial market. These can be illogical assets’ movements, taking positions off the market due to the release of fundamental news or a change in monetary policy. In addition, the fix api forex brokerage company is setting additional spreads and markups for its customers. In order to decrease the pressure of these factors, each trader should know which broker to work with and which one should be avoided.

Today I am going to investigate this issue and identify how to choose the optimal broker for your fix api trading. Moreover, you would be able to find out if your current trading conditions supplier is a reliable partner for working in the financial market.

So, let me distinguish several key features, which the quality brokerage companies should have:

  1. The market spreads;
  2. The ability to select multiple trading terminals;
  3. The possibility of algorithmic trading;
  4. The access to fix api;
  5. The open information on the company’s website.

Let’s look at each of the types in more details.

The market spreads

This parameter indicates that the broker takes quotes from the market or a reliable liquidity provider. If you see a fixed percentage, it means that the broker takes a fixed percentage of your trade. If the spreads are the market ones, then at the time of the strong news, your positions will be opened at a fixed price or at least close to it. Or if there are already open positions, they will not be closed with greater risk than you asked. This indicator directly affects the financial result of the trade and the trader himself is not able to solve it (only using fix api).

The possibility to select several trading terminals

 We are accustomed to the fact that if there is one broker, then there should be one terminal. However, this is far from true. You should have a choice of the most optimal software for fix api trading. The best option will be if the terminal is able to receive information from the market. It will be a significant advantage for the brokerage company. The fix api MT4 might suffice for somebody, but I reckon, that it is necessary to have the other options as well.

The possibility of the algorithmic trading

 It is a well-known fact, that the robots are capable of trading stably with the minimum risk parameters and a large indicator of profitability (http://forexzzz.com/product/forex-zzz-lock-arbitrage-10per/ ). If the broker prohibits this approach, then, firstly, it means that he is not able to pay the trader his profit, and secondly, the transactions do not overlap the market and are traded on the server of the brokerage company (the Dealing Desk system). This will immediately tell you that the broker is not reliable and it is better not to place the funds in such a company.

The access to fix api

If the brokerage company doesn’t give an asset to the fix protocol, it guarantees the quality of the company. On the other hand, if you are in doubt then you can independently trade via fix api on the side of the liquidity supplier. You can the trading robots for that. This solves several issues simultaneously.

The open information on the company’s website

 The information such as: “our liquidity providers” or “our diplomas” does not tell the trader anything. Therefore, it is better if there is the information on legislation the broker relies on and where it is registered. This will tell you much more about the broker.

You can analyze your broker even now according to the list above. It is a good filter, which is worth using before placing the investment capital for the trading.

 

 

Why should a trader track the trade of his competitors?


Trading in the financial markets implies the constant search of the investment opportunities and tracking the current market trends. The manager should do it on a regular basis. It is a normal process that should be done throughout the time. Also, the manager should know about the competitors’ actions. It is a crucial condition in order to achieve the desired results. Also, it is important because a financial market is a unified platform, where all the players perform. So, if you would be aware of the competitors’ actions beforehand, you would operate more efficiently.

There are various platforms, which are dedicated to the different traders’ communication as well as tracing their trading process if they show their results. Anyone, even your colleague, can be your competitor in fix api trading as soon as you commit different trading operations. Therefore you should always be familiar with and track the most traders’ thoughts.

Of course, it is not necessary to track every statement on or publication of poorly-known managers. On the other hand, the opinion leaders’ predictions are very useful for you. They serve as a valuable tool for the further exchange transactions execution. Almost the entire market follows the opinion leaders. Let’s be honest. If Buffet gives the advice to purchase some valuable papers, you would most likely follow it, right? Moreover, you would not only invest your entire capital in it but also engage your colleagues and friends to do the same.

So, where can the one find the other market players’ opinions? First of all, I want to emphasize a couple of platforms, which you can use for this need or even make your personal account there.

  1. The social networks. Nowadays the social media marketing has expanded beyond any expectations. Each company has its own profile or a company’s page which you can follow online. Some famous traders also have their social media pages and you can follow them as well.
  2. The personal blogs. If the owner feels good about sharing a personal opinion or some predictions, then there is a personal website or blog. It collects the entire information, dedicated to the trader’s experience. You can check it out a couple of times a week to find out if a trader takes a bull or a bear approach.
  3. The websites, which are aimed to connect the traders and market participants on one platform.Such websites allow to lead an effective networking as well as communicate with other fix api traders and representatives of brokerage or investment companies. Often there is a possibility to publish your trading account to demonstrate the trading results on such platforms. It allows you to attract the new investors and analyze trading results of other players. Fxsocialnet(http://fxsocialnet.com)isoneofsuchresources.

The forums. Perhaps, it is one of the first and large-scale resources for the traders’ communication. Forums are kind of a database, which contains a lot of useful information and would be suitable for both newbies and professionals.

I do not reject the fact that each trader has to have a trading strategy to be able to complete trading operations on fix api  forex market. On the contrary, I encourage everyone to create it, if you don’t have one yet. A clear trading algorithm lets you know at what prices it is necessary to open trading transactions, and when it is better to close them (https://admiralmarkets.com/education/articles/forex-strategy/best-forex-trading-strategies-that-work). The system represents how you see the market. So, monitoring how the others see it can be a confirming or refuting factor in making an investment decision. Moreover, you would be able to analyze how another trader makes predictions and compare his prognosis to your own one. Only then you can commit any actions.

 

Trade on exchange rate differences: what is this?


In order to earn consistently in the financial market, each trader selects for himself the set of rules and principles of trade that in the long run can turn into a passive source of income. That is why so many books, articles, and hours of continuous workare devoted to fix api trading. That is why so many approaches have been created in the assets analysis and forecasting. That’s why, so many types of trading systems and trading robots are created. Today, I will talk about one of the methods that is widely known in the market and is no longer new. But thanks to the modern approach of use, the strategy becomes universal for everyone. It’s about trading on the basis of exchange rate discrepancies, which are also called arbitrage trading.

Arbitration is a trading strategy that is not based on the analysis of asset movement or the determination of fundamental factors, but directly on the current value of the asset. But since one cost is not enough, the current value of the asset price is compared with an identical financial tool, but on another platform. To put it simply, the entire process of analyzing and opening trading positions is reduced to determining the exchange rate differences between the same asset, but on different stock exchanges or broker companies (http://www.investopedia.com/terms/a/arbitrage.asp).

A bit of history

This approach has become quite popular during the birth of digital fix api trading. The trader was able to track the market of America, Asia or Europe in real time, which made it possible to compare prices between a single asset group. So, for example, you could buy an asset on one exchange and then sell it to another, where the price is slightly higher. Such an approach had no risks and it all wasreduced to the speed and skills of the manager.

Today’s reality

Fix api arbitration approach was one of the first, which was implemented in trading algorithms for making transactions between different exchanges. It was arbitration that gave rise to the modern HFT trading and launched a chain of trading robots in the work with the market.

Of course, it was quite easy to implement such a principle of work in the stock or commodity market. But if it was for the currency market, then there were certain difficulties. The thing is that fix api forex is essentially a single financial platform where a lot of currency-exchange transactions are made. Therefore, it is theoretically difficult to determine the exchange rate divergence of currency pairs. Or we should use triangular arbitration, but again, this approach is realized using a trading robot, because it is almost impossible to perform arbitrage operations in such a volatile market in a “manual” mode.

The use of arbitrage strategies in the forex market became possible due to the emergence of a huge number of brokerage organizations that provide services in access to the market and set small mark-ups on assets. Thanks to these margins,fix api trading is possible on exchange rate differences.

There are programs (http://forexzzz.com/ru/product/forex-zzz-lock-arbitrage/) that connect to different accounts between brokers and are able to analyze directly the current value. At the moment when there is a price divergence, the algorithm concludes the transaction in order to fix several points of profit. The more the broker’s extra charge, the higher the profit potential can be fixed. The whole result is created due to the number of transactions opened by the robot and the list of currency pairs.

The main thing to remember is that it’s better to choose a reliable broker and prime broker that will ensure the safety of your investment capital, and also ensure a stable withdrawal of funds. After all, if you open an account in the fix apiforex brokerage company where margins are more, but the quality of the company is much lower, then the entire result can be reduced to zero.