New and recent software for the Forex market: The arbitration lock


Modern trading calls for modern solutions. More and more software is being created in the marketplace, which simplifies the process of trade and financial analysis itself. This software allows the trader to automate its business process. In turn software like this also bears increased risks if the product is of low quality.

There are trade strategies that cannot work without software like this. I’m talking about the arbitration fix api trading, which is a combination of analyzing a financial asset and trading transactions when there is a deviation in the price value of currency pairs. Despite the simplicity of the algorithm, it is agreed that the individual is simply not physically able to keep track of the entire market and all currency pairs on the fix api forex, and also to perform commercial operations. However, turning this into code and separate software allows this process to be applied in automated mode.

Today, I offer you to look at the several options and types of software that are appropriate for this type of trading.

To begin with, I want to point out that the market for trading has grown and developed each year. And today you need to use only the latest versions or a entirely new application that takes current market trends into account.

One of the most popular types for the farbitratrary trading fix api is the individual applications that are not integrated into the trade terminal. With the trade protocol FIX, you can get data directly from the market. This allows multiple liquidity providers to be used, which makes it more flexible.

Let’s take a look at this example:

Such programs have their own interface and internal settings, where, again, you can select a quote provider, set parameters for trading, and so on. We know that for trade according to lock arbitrage, we need to consider the spread and expansion by which a robot or program opens trade transactions. Or even set the fix level of the position. All of these options are already included in the software and can be adapted to your expectations and conditions.

So all you need from the fix api trader is to set up the program, set the key figures on which the algorithm will analyze and bid. That’s it. Next time the trader only needs to optimize the selected parameters and define the result.

These days such programmes, in my opinion, are leaders in this area. However, there are several other options available today:

  1. A program (commercial robot) that performs operations through a commercial terminal. These are typically applications written for the popular trading platform fix api MT4. This is connected to the terminal and performs arbitrary trading automatically.
  2. Programmes intended for FIX. All trades bypass the terminal, but still through a broker or liquidity provider that gives access to the server. The drawback is that in order to connect to a particular prime fix API broker, you have to change the program’s internal settings.
  3. Supporting utilities and scripts. This type of software does not automatically make the transaction, but only displays the exchange rate differences and reports this to the trader.

As you can see, the new software outpaces both its competitors and its predecessors, not only to simplify the process, but also to make it better and help it to achieve better results.

And a little hint from me: during the software selection, consider the developer’s support so that when you update the algorithm, you can also get it.

My favorite trading tool: 2-Leg Latency Arbitrage. And here’s why.


Times of trading with only a phone handset are far behind. There are many support tools in the market that each trader uses in their trading. Whether they are platforms, authorial indicators, or algorithmic trading strategies. Today, we will look at the latter type, namely the instrument that I use in my FIX API trading, the 2-Leg Latency Arbitrage.

To begin, let me determine that this robot’s algorithm is within the FIX API arbitrage strategy. Simply put, the robot does not analyze historical prices, only the current quotes. On the basis of these the system decides to buy or sell the financial instrument.

But what is the essence of 2-Leg Latency Arbitrage?

This arbitration trading strategy consists of an analysis of the same currency pair, but at different sites and when the prices are significantly different, the robot opens the buy transaction at the site where the quotations are lower and, accordingly, sell where prices are higher.

To learn more about this method, I suggest you consider the example of how my own robot works:

Conditions:

The price of the EUR/USD currency pair at the broker #1 is 1.0805

The price of the EUR/USD currency pair at broker #2 is 1.0800

Open the transaction at the 3 points exchange rate difference.

Thus, the algorithm continuously analyses the ticks received and, when the quotations differ more than 3 points, opens the relevant transaction. As seen in this example, this condition is met, because the difference between the value of assets is 5 points.

The next action of the robot will be to open the transaction. As written above, the trading robot buys where the price is lower and sells where it’s higher. Accordingly, the algorithm will open a sell deal at the first FIX API Forex broker and the buy deal at the second one. Finally, when the difference comes back to normative values of 2-3 points, the robot will close the deal. Let the price at the broker #1 was 1.0800, and at the second 1.0808. Thus, the first operation returns 10 points, and the second makes loss of 3 points. As a result, I get 7 points of profit in a fraction of a second, because the market is not staionary and is constantly moving.

On the basis of the example, this trading strategy has a simple algorithm, as well as a number of significant advantages. Namely:

  • Risk-free trading. Opening a buy and a sell deal on the same asset, this ensures that the funds are secured in case of force majeure, because if a robot is to buy before the important economic data is available, which will cause an instantaneous reaction, there is always one negative deal, and the other one positive with the minimum difference (as in our example of 7 points).
  • The algorithm is hard to track because of opening at different brokerage sites. There are brokerage companies that prohibit this type of trading. However, this type of arbitration resembles scalping trade. In order to understand that transactions were carried out according to the arbitration, it is necessary to analyze the direction in which the deal was made, so two transactions are to be analyzed.
  • A large number of trade transactions. The robot is capable of doing more than 50 speculative transactions for several points per day, which in turn guarantees profit.

These key advantages, as well as the simplicity of using this trading algorithm, makes the FIX API 2-Leg Latency Arbitrageone of the best trading software products for me.

I have also come across an interesting solution provided by forexzzz where within their Lock Arbitrage product they give you 5 different free fast feeds to avoid opening account with fast broker.

Of course, as many traders, so many preferences there are. However, I recommend that you use this type of algotrading even with “manual”, or your individual trading strategies, because 2-Leg Latency Arbitrage is ideally combined with other trading systems.

 

Locking arbitration latencies: what is it?


Arbitration is one of the types of high-frequency trading (HFT), the essence of which is to analyze the exchange rate of the same currency pair in search for exchange rate differences. The basic principle of this strategy is the simultaneous analysis of the asset, but at different sites. So the FIX API trader determines the direction of the movement by analyzing two brokerage companies, knowing which  broker’s quotes are lagging behind, and which one provides them faster. This makes it possible to make a transaction  at the direction of the “fast” broker, but at the site of the “slow” FIX API Forex broker.

The development of trading and algorithmic trade has led to the creation of several variations of this strategy, which allows the classical arbitration to be divided into three types:

    • Triangular arbitrage;
  • FIX API 2-Leg Arbitrage;
  • FIX API Latency Arbitrage.

 

The standard and most renowned is the third type, which we will discuss today.

Latency arbitrage is arbitration of latencies and is represented by a classical method of performing arbitration deals: determine the exchange difference between the two stock sites and making the trade transaction at a faster supplier of quotations. However, there are also variations of this type, one of which is Lock Latency Arbitrage. This subtype, which is similarly to the main works by the same algorithm, but holds the positions in a kind of a “lock”, thus not exceeding the specified risk threshold.

To understand how this technique works, let’s look at an example:

The quotation of the EUR/GBP currency pair at the broker #1 (quick) is 0.8440;

The EUR/GBP currency pair at the broker #2 (slow) is 0.8445;

According to the latency arbitration strategy, the trading algorithm would “sell” the asset at the second broker. But! According to the Lock Latency Arbitrage, the transactions are opened at both brokers (like with 2-Leg Arbitrage, with the difference that you need to know where the quotations demonstrate more relevant prices). Both transactions are set with stop loss and trailing stop levels, on reaching which the transaction is closed and gets opened at another broker.

Thus, the lock is set, and active positions remain at the second broker only. When you are able to open a position (an extension of the EUR/GBP rate difference at different brokerage companies), the trading robot closes the positive transaction and opens the opposite one at the other site. The revenue is generated when positive transactions are closed, while the drawdown transactions will always be “locked” and the risk percentage will not be exceeded.

This strategy retains open positions over a long period of time, ensuring the preservation of funds and a steady capital increase.

Advantages of Lock Latency Arbitrage:

  1. Work with spreads: this makes it possible not to be afraid of the big difference between bid and ask prices, because this difference will play into the hands of the FIX API trader;
  2. Risk control: based on the fact that the transactions will be in the lock, the risk percentage will not increase and will always be static at a certain percentage;
  3. The ability to open a large number of paired instruments: that is, when there is a deal for +50 and -45 dollars, the funds make up +5 dollars to the initial deposit, allowing you to open many new transactions, thereby increasing the financial result;
  4. Positive values of trading strategy indicators, primarily mathematical expectation and drawdown level.

The proper use of Lock Latency Arbitrage makes it possible to earn a stable income in the FIX API Forex market, because it does not require a complex algorithm or an integrated approach to the asset flow analysis. All you need to know is the current state of the price and how to earn on it.

Arbitration lock: how does it work?


Arbitration is one of the types of algorithmic trading, the essence of which is the analysis of price differences of the same currency pair, but on different stock sites or at different FIX API Forex brokers.

There are three main types of arbitration trading, which differ in their internal methodology of conducting trade transactions, namely:

  • Triangular Arbitrage
  • FIX API Latency Arbitrage
  • FIX API 2-Leg Arbitrage.

Today I’ll discuss the latter and its modification, the Lock Arbitrage.

The arbitration lock algorithm suggests to open different orders (buy/sell) simultaneously for the same financial asset, but at different sites, at a time when there is a difference between the prices of the asset. The main thing is that the stop loss is set for these transactions, and they are closed at these levels or by trailing stop.

Let’s look at an example:

The value of the EUR/USD currency pair  is 1.07555 at the FIX API Forex broker A.

The value of the EUR/USD currency pair   at the FIX API Forex brokerB is 1.07550.

The algorithm should sell at the first broker and buy at the second one. When a sell (or buy) transaction is closed at the stop loss level, the algorithm opens this   transaction again, but at the broker where the sell (or buy) transaction is located. Thus, a lock is formed on the account of one broker. In our example, at broker B. Thus, all trading activity is transferred to one broker so there’s a “lock”, when transactions are opened for the same currency pair but in different directions.

The next step is to find a new investment perspective, when the same currency pair will again allow to perform an arbitration operation. The profitable transaction is then closed at the current level, and a new transaction is committed at the inactive broker.

Thus, the drawdown level will not exceed the specified percentage, which is an advantage of this type of trading.

 

Scalping robots vs. arbitrage robots: the key differences


Often new traders are not able to identify the key differences between different algorithmic strategies. More popular trading systems can be distinguished, but there are some that greatly resemble each other, while being fundamentally different. Two of these algorithmic strategies are scalping and FIX API arbitrage.

Scalping robots are conducting short-term trading to capture just a few pips of profit. The point is to open a large number of speculative positions, which constitutes the result. The algorithm for opening a position can be based on almost any method.

For example, a scalping robot may be based on the intersection of moving averages with different periods, and the RSI oscillator. When there’s a signal from these indicators, the robot opens the deals and holds them for about 1-2 minutes. It is not difficult to guess that here the  timeframe ranges from M1 to M5.

The arbitration robot opens speculative positions based on the availability of exchange differences. Neither graphic nor technical analysis, nor the timeframe are important. Only the information of the currency pair price is needed to commit the transaction. The algorithm for making the transactions depends on the type of FIX API arbitrage trading:

  1. Fix API Latency Arbitrage algorithm analyzes the same currency pair at different stock sites (different FIX API Forex brokers) and buys the asset at a slower broker to the price of a broker with more relevant quotes;
  2. Fix API 2-Leg Arbitrage is a technique similar to the first, but it opens a deal at two brokers simultaneously in the direction of spread (difference);
  3. Triangular Arbitrage algorithm analyzes three currency pairs at the same time and seeks the difference between the conversion market price and bids from other players.

Given these internal characteristics, it is not difficult to conclude that scalping robots are different from the arbitration ones by their method (algorithm) of trading. The similarity is only in the opening of many transactions and fixing a minimum profit percentage. Arbitration can be considered as a variant of scalping, but not as the same algorithmic trading strategy.

The arbitration robot opens speculative positions based on the availability of exchange differences. Neither graphic nor technical analysis, nor the timeframe are important. Only the information of the currency pair price is needed to commit the transaction. The algorithm for making the transactions depends on the type of FIX API arbitrage trading:

  1. Fix API Latency Arbitrage algorithm analyzes the same currency pair at different stock sites (different FIX API Forex brokers) and buys the asset at a slower broker to the price of a broker with more relevant quotes;
  2. Fix API 2-Leg Arbitrage is a technique similar to the first, but it opens a deal at two brokers simultaneously in the direction of spread (difference);
  3. Triangular Arbitrage algorithm analyzes three currency pairs at the same time and seeks the difference between the conversion market price and bids from other players.

Given these internal characteristics, it is not difficult to conclude that scalping robots are different from the arbitration ones by their method (algorithm) of trading. The similarity is only in the opening of many transactions and fixing a minimum profit percentage. Arbitration can be considered as a variant of scalping, but not as the same algorithmic trading strategy.

 

 

 

What is PAMM?


Interest in FIX API trading is growing with every year. The number of traders, as well as investors, rises exponentially, creating entire communities of players in the financial market. Social activity has also affected the financial markets, and the result of trading activities is now discussed at various thematic sites: yield curves, financial indicators, selected strategies get demonstrated. This is done to improve the quality of trading and to increase financial results.

Now it has even become possible to invest in a trader on the basis of their indicators, strategy and other factors. Investment accounts, trust management and PAMM accounts are created.

Today I’m going to discuss the latter form, considering the key features of this system, and what you should look at when you select a PAMM account.

The PAMM account (Percent Allocation Management Module) is an investment tool that involves investing funds in an account of a manager who takes them into trust management. Simply put, the FIX API trader opens such an account and can attract additional funds on the basis of their trade results.

PAMM account cycle:

  1. The trader, who has a positive result from their trade activities, opens a PAMM account;
  2. The PAMM account is public, which gives an opportunity to review the work of its manager;
  3. On the basis of positive statistics, the investor decides to invest money into the PAMM account;
  4. The manager takes the money into trust and gets additional fee in the event of a positive trade activity.

Funds from trading are distributed evenly according to the share of funds invested. For example, you decide to invest $10,000 into a PAMM account which already has the same amount. Thus, if the manager is able to earn $1,000 month, the funds will be divided 50/50 (excl. the manager’s fee). If another amount is invested, e.g. $5,000, the share of the first investor is 40%, and of the second one it is 20%. And, of course, 40% are the manager’s. Although the share is reduced, the trader has the opportunity to open more positions with additional funds and to increase the financial result.

The PAMM account displays all the activities of the trader, which allows to identify the market in which the operations are performed, the manager’s tradinig methodology and its financial performance. Particular attention is paid to indicators, because decision-making is based on them.

What you need to pay attention to when you select the PAMM account:

  1. Period of account’s existence. The longer the period, the more reliable the managers. This shows good long-term perspectives. It’s best to select the PAMM accounts with the period more than of one year;
  2. Balance and funds yield curve. This will help to determine how smoothly the deposit grows and whether there is a deviation in these lines. If the deviation is observed, it is a sign that the trader allows large drawdowns.
  3. The actual drawdown percentage. Note whether the trader has ever allowed a large negative result on the funds. This will indicate whether the trader keeps losing positions or closes them. There is no normative value, but I recommend that you do not work with accounts that allow more than 20% drawdown.
  4. Trading coefficients. You should also pay attention to the mathematical expectation, Sharpe coefficient, average profitable and unprofitable deals, and so on.
  5. Account rating. The last point I’d make is the comparison of the managers by position in the PAMM system rating. The first place is not yet the indicator of the best manager. However, you better choose from the top ten.

Triangular arbitrage: what is it?


With the development of trading, more trading strategies are created to efficiently process transactions on the financial market. New algorithms for performing operations, methods of analysis and forecasting prices on FIX API Forex, as well as algorithmic systems have expanded investment opportunities for traders. The development of information technologies has enabled to automate transactions. In consequence, a technique for arbitrage deals on the market appeared.

FIX API arbitration is a type of trading strategy, which suggests to search for exchange differences on various stock exchanges. To put it simply, this strategy enables to analyze whether there are discrepancies in the prices at different brokers or market players, and to trade in the direction of the exchange rate difference.

There are several types of arbitrage trade:

  • Latency Arbitrage
  • 2-Leg Arbitrage
  • Triangular Arbitrage

The first type suggests to open just one position, the second – two positions; while the third, as it is not difficult to guess, is opening three orders on different platforms or with different market players. Let’s talk today about Triangular Arbitrage.

As I wrote above, this type of arbitrage strategy is based on analysing and opening multiple trades, one after another. And while FIX API Latency Arbitrage and FIX API 2-Leg Arbitrage are quite clear, this type is a bit more complex, though easy to apply. In order to understand this, let’s look at a real example.

The trader analyzes the market and finds some deviations in prices that are now present on the market. Let’s simulate the situation.

Trader A has USD 100,000 worth of assets and looks for the most advantageous investment. Trader B sells the EUR/USD currency pair at the price 1.0780. Trader C buys the EUR/GBP currency pair for 1.2200. It turns out that the rate of GBP/USD is 1.3151. However, trader D buys the GBP/USD for 1.3155. Trader A sees this situation on the market and decides to “get in the triangle” and commit a trade with all participants.

As a result, the arbitration triangle is as follows:

  1. Trader A buys the EUR/USD currency pair form trader B for their assets: 100,000/1.0780 = EUR 92,764.37.
  2.  Trader A sells EUR for GBP to the trader C: 92,764.37/1.2200 = GBP 76,036.37.
  3. Trader A sells GBP to trader D for USD 1.3152: 76,036.37 *1.3155 = USD 100,025.84.

Thus, trader A in a fraction of a second commits three trading operations with 0.025% profitability.

For an additional example in visual form:

Let me first draw attention to the fact that this example is based on a minimum volume on FIX API forex market. Often these operations are performed by large hedge funds and banks, where volumes of trading operation can be more then ten million dollars. Moreover, several such transactions can be committed per day, which also potentially increases the yield. Also note the fact that a number of FIX API Forex brokers provide the possibility of margin trading, which allows the use of this type of trading for any general market players.

As you may have guessed, it is very difficult to carry out such operation in “manual” mode. Therefore trading robots are created that automatically search for such exchange differences and commit instant trades.

Benefits of the triangular arbitrage strategy:

  • Diversification of exchange differences;
  • Risk minimization;
  • There are practically no risk of operation drawdown, since the transactions execute instantly;
  • There is a significant difference in the value of assets between trade participants (in the example above, the difference was 4 points, and in practice there are cases with the margin up to 20-30 points) that increases the potential yield.

Disadvantages of the triangular arbitrage strategy:

  • Use of slow software can lead to performing operations on irrelevant prices, which increases the risks.

To sum up, I would like to note that the strategy allows to optimize trading and increase the yield from speculative transactions. Moreover, the use of special software allows to reduce risks down to zero, which, in turn, will increase the financial result of trading.

 

What is MACD?


MACD (moving average convergence/divergence) is a technical indicator that shows the relation between the moving averages. This indicator is able to determine the price entry and divergence, while also showing market entry points.

This indicator is widely used among traders as its algorithm and specificity allow to use it as a trend indicator and as an oscillator. Thanks to this indicator it is possible to determine the market phase, the position of the currency pair at FIX API Forex market, and find points of correction spreads.

Internal features of MACD

The indicator consists of two exponential moving averages with the periods of 26 and 12. Also it includes histograms that show the difference in pips between these moving averages. There is also a modification in which MACD is filtered and gives more accurate signals. That is, the indicator also uses a simple 9-period moving average. Thus, the indicator has a MACD line and a signal one, which allows to expand the list of signals.

Signals generated by the MACD technical indicator:

  1. Intersection of lines and balance. Use of the second line will make it easier to identify buy and sell signals. At the moment when the MACD line crosses the signal line from top to bottom, it showes a downtrend, therefore, a sell signal. If the same goes bottom-up, it is a buy signal. The greater the value between the two lines, the more stable the trend. Also an additional signal to enter the market is the intersection of all the same MACD line with the balance line. Balance line is the zero indicator mark. Signals are working by the same scheme: when crossed from top to bottom, it’s a sell signal; and a buy signal vice-versa.
  2. The “overbought” and “oversold” state of a financial instrument. One MACD feature is that it can be used as a trend indicator as well as the oscillator. Histograms allow to identify possible correction zones and end of the trend. When these indicators demonstrate impulse rise or fall, it means the asset significantly deviates from the average values and one should expect a return to normal values. For example, when the value dropped too much, one should expect the quotations to return to previous levels.
  3. Divergence signal. Even the title of this indicator reveals its main signal. Divergence is a difference of technical indicator values with the market price of the asset. So, when the quotes are falling, and MACD grows, this shows the divergence (in this case of a bullish type). An important difference from the second signal is the fact that the histogram has to be compared with quotes and the trader should look for the presence of two differences. That is, the line has to be drawn both at the indicator and on the chart. In the first case, the line should go down, while in the second case it should rise. Vice verca for the bearish divergence.

As we have seen, the MACD itself is capable of generating multiple signals. But to improve its efficiency, this indicator can be combined with others. Therefore, this indicator is perfectly combined with:

  • Fibonacci levels to find the end of the trend and correction movement;
  • ATR to determine trend strength;
  • Trend inductors, to confirm the signal from the MACD.

MACD is a built-in indicator in the FIX API MT4 trading platform. There are also many free specifications, but the principle remains the same. This allows to use it without difficulties in any trading strategy. Moreover, MACD will optimize your system and get rid of excessive signals, which will make trading more profitable and focused on the result.

 

 

How to create a Forex robot for FIX API trading


Algorithmic trading gets more and more attention on the market with a vast variety of utilities and trading algorithms created to perform market analysis and make trading operations automatically. There are already plenty of paid and free robots, so it’s difficult to surprise a modern trader with anything new.

However, most robots are written based on standard algorithms which significantly narrows down their use. After all, the success of the robot directly depends on its speed of trading. A written algorithm has to replace the constant monitoring of the actual market situation. But how do you adapt to this current situation?

A solution was found with the help of a financial FIX protocol.

For reference: FIX is a special financial protocol which enables to receive up-to-date information from financial markets (quotations, news, etc.).

The whole point of this protocol is in rapid information exchange. And for us traders, it is necessary to know the one thing first and foremost, that is, the value of a financial asset. The more precise the value, the stronger the signal according to the trading system. And, of course, the robot that will receive the accurate actual data, can process it quickly and make deals.

The problem is that almost 90% of the robots are written to work on a broker’s trading site (a server), but not via FIX protocol. Most brokers already give their clients access to this protocol, yet not all of them use it. But the advantage of the protocol is obvious! This protocol allows to:

  • Make transactions at market prices without spreads and slippages;
  • Open transactions without delays;
  • Conduct a comprehensive asset analysis;
  • Perform effective arbitration trade (FIX API Latency and FIX API 2-Leg Arbitrage);
  • Use effective scalping strategy.

And this is still not a complete list. A robot written specifically for FIX API trading is able to make more accurate analysis and increase the share of profitable deals.

It should be understood though, that the technique of writing a trading robot for FIX API trading is virtually no different from writing robots for server trading, because it doesn’t require learning a programming language or new classes or methods. FIX API robot can be written using the FIX API Java, FIX API python or FIX API C# libraries which can be simply integrated into the development environment.

To create an automated FIX API algorithm, you need to:

  1. Write a robot in one of the programming languages;
  2. Create a class for reading XML messages, FIXML;
  3. Create a class for sending these messages;
  4. Implement a complete object model, with which will trading via the protocol be conducted.

These four elements will enable the trading robot to work via the FIX protocol. The point is that the robot will “pull” the information directly from the quotations (liquidity) supplier and thereby avoid possible delays on the server side. The difference with a simple robot is minimal, yet the result is great:

  • The number of transactions increases;
  • The ratio of profitable to unprofitable deals also grows;
  • Financial indicators of profitability and profit factor improve on average by 10-15%.

Benefits of robots are clearly visible in FIX API arbitration trading. What’s necessary here is being able to get price information as quick as possible, which allows to make transactions despite brokers’ latencies.

Of course, working via a FIX API broker is required for such a robot.

A trading robot created to work with FIX protocol becomes an indispensable tool for successful trading. It simultaneously solves the problems of “manual” trading and data accuracy, which affects the quality of forecasts and the financial result.

 

News-based trading: how to use it


Every trader should understand that in fact, trading based on news analysis is conducted almost all the time. FIX API traders are guided by various factors when opening buy and sell positions, but many of them do not consider these factors individually and only rely on what has already happened. But what is working with news actually about?

Many news have no impact on the market. So they are usually divided into 3 types:

-strong;

-average;

-weak.

Yes, that’s exactly how economic calendars distinguish the fundamental background using these categories. You can look at any calendar and see the power type of the news, which is often indicated by icons such as bulls/bears/stars/exclamation points, etc.

Particular attention should be paid to the medium or strong news, which relate to macroeconomic situations.

It would seem not difficult at all to be simply attentive to what is happening in the market. Yet news can be planned or unexpected. You can predict the market reaction to the planned news, but what if it’s some kind of force majeure? For example, a tsunami, a country default, a bank failure, a disaster, a terrorist attack, etc. Yes, it can hardly be called “news”, but still, breaking news may make even more stir than Mario Draghi at a press conference. I guess it makes no sense to continue.

My experience shows that the news only confirm the trend. When a fundamental indicator is released, the markets often move in the direction of the trend. Only a minimal deviation from the past or forecast data can adjust the already established movement. For example, Brexit: the British pound fell to a 30-year minimum. Yet if you examine the chart, you’ll see that the GBP/USD currency pair was at a steady downward monthly trend from 2014 already.

News will always affect the market, therefore you as a trader can not do without them. Therefore, it is important to carry out the forecast properly, on the basis of the received data.

To effectively conduct the FIX API trading, you should act right at the time of the release of the news. Let’s take a look, how to trade at this moment:

  1. When trading on the news, it doesn’t matter which way the market will go, because the FIX API MT4 trading terminal allows to place pending orders on both sides. So before the news are published, you should set two pending orders, buy stop and sell stop.
  2. Set the range within 10-15 points so that transactions don’t enter the market at the moment of “market stir”.
  3. When you open one of the positions you should close the second one. This will limit the risk, as well as help avoid a lock.
  4. Establish effective trailing stop position. News usually cause increased volatility and in a matter of seconds can demonstrate movement of 100 points. To get profit from this movement, you should move the deals to break-even point or yet again “trawl” the position. I personally shift each break-even stop loss for every profitable bar on a small time frame.

5. Also I recommend locking position in the first hour after the news because the strong momentum is accompanied with the same correction. From my experience I would say that on FIX API Forex, corrective movements are  observed exactly after the first hour since the release of fundamental data.

This is a working news-based trading algorithm, which is widely used by market players and which I use in my trading.

Also there are algorithmic systems, for example, Expert Advisor, which commit trade activity at the time of the news release according to the algorithm which I described above.

News-based trading is an effective tool for capital increase, which requires certain knowledge and skills.