Financial Trading Report and Blog by exacttrading.
Report Date 14th November 2021: Author Paul Langham
Algorithmic Trading And FX
On of the advantages of algorithmic trading and FX is that 24 hour time frame of the market which allows for continuous price discovery during the period of an entire week without market closure at the end of the day
FX Trading
I have long held the believe that FX is a very suitable market for algorithmic trading due to its 24 hour time frame and 5 day a week opening.
If a trader is trading a short term time frame like 30 minutes there will be many opportunities each week to get involved in the markets, with the hinderance and jolting effect of a market which closes at 4 PM every week day and jolts open, high or lower than the closing price the next morning.
So how can FX Learn ?
Many traders forget that the principal reason FX markets exist is for the purpose of commercial transactions. Everyone bangs on about Central banks and their interest rate policies but such policies do not in themselves create trades, notwithstanding that traders like to trade off their hunches for interest rate directions.
Trades are created due to commercial transactions that take place in the course of everyday business between legal entities.
Speculation by banks and professional traders adds to the froth.
When you look at a big FX market like E/U you will notice how, 'generally' it trades within specific confines of price and volatility, both of which are driven by economic as well as political factors. FX is more likely to stay within the 'holding range' of such constraints as opposed to an instrument like oil which can spike up and down hundreds of percent in a period of months.
FX then is required to learn very gently and slowly and any ML results applied to an algorithmic are more likely to tweak and existing strategy rather than completely revamp it.
Report Date 9th November 2021: Author Paul Langham
Machine Learning helps the trader adapt to changing FX market conditions
FX conditions are mostly stable, unlike stock markets which have tendency to dive sharply in times of market crisis, this enables us to have algorithms which are relatively stable and which rarely need 'end of term' modification.
FX pairs and algorithmic trading
As many of you will know there are numerous FX pairs which are tradeable.
The majors offer the best spreads and overall trading costs , some of the exotiques offer the best volatility and weekly range.
FX trading costs can be significant, especially if you take into account overnight SWAP, which most brokers charge at negative rates for both LONG and SHORT positions..... This is the latest ruse to take money off retail traders on the premise zero spreads are available but the money is earnt on the SWAP.
My best FX algos trades intraday and does not get involved with the costs of holding overnight nor over the weekend when occasionaly there can be very big shifts in the market.
Momentum is King
Most of the time FX pairs trade aimlessly, in quite tight ranges as commercial transactions ebb and flow; backwards and forwards as the days activities gets filled by the banks.
Sometimes price will make its move and these are the trades we need to be involved with. Strong momentum trades that are easily detectable and last for a finite period of time.
In my training I will present this type of algo to you that can trade in such a manner.
Forex and Algorithmic Trading using Machine Learning
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As the founder of Exact Trading, Paul has been actively trading the markets for over 30 years and specializes in the Forex Exchange markets with index and Crypto trading as well.
Paul Langham
Founder Exact Trading
In the last 10 years there has been a revolution in automated trading. Most of the trades entered by banks and other financial institutions are done so using computers. As a retail trader you should follow suit.
Algorithmic Trading
Design
Most of the worlds top banks and Hedge Funds are developing automated trading strategies - across various markets - that 'learn as they trade'. Automated trading is now becoming more and more popular amongst retail traders as well.
Machine Learning
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Paul Langham
Please note we never ever sell of distribute any email addresses we obtain we hate SPAM as must as you do. Nor do we promote other traders trading applications/tools or work with affiliate marketers or brokers.
Frequently Asked Questions
Below you will find answers to some of the most frequently asked questions
I don't know anything about trading?
This course is presented in any easy to consume style and it explains in a step by step manner the necessary steps to getting set up.
Can you explain why you prefer automated trading?
All of the top banks have automated their trading. The rows of bums on seats traders screaming down a telephone have long gone.
How can I get involved?
Click on the link on this page to find out more.
Which is best FX, Index trading or Crypto?
My machine learning algos work on all instrument types, with some being more suited to FX and Crypto due to their continuous 24 hour market cycle structure.
So what is machine learning?
Markets change, just like the weather, a one size fits all approach to trading no longer works. Good and robust traditional momentum trading methods have become squeezed, especially in FX, this is due to the number of competing algos in the market.
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Algorithmic Trading using Machine Learning
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