The growth of activity in the world markets among traders, as well as the constant progress of technology, led to an increase in the speed of actions carried out by players on the trading floor. Today, many traders actively working with various financial instruments prefer trading robots rather than manual trading. This is largely due to the speed of operationsand their volume. Let\u0027s see, what is a trading robot? A trading robot is a special program created by a special algorithm, according to which it conducts trading operations. [nerd] Let\u0027s take a closer look at the features of such programs. The trading robot program allows you to fully or partially take over the process of working on the trading floor. The trader, as the operator of the trading robot, has the possibility of full control over it, which allows the robot to adjust the trading robot, make changes to the program code or change the algorithm. The trading robot in Autonomous operation independently makes decisionson orders and transactions, according to the established criteria of its algorithm, with intervention in the user\u0027s process, operations can be carried out inmanual mode. Theprogram code of the trading robot is based on calculated and thought-out mathematical sequences. Keeping track of different data such as indexes, indicators and other market data obtained from the exchange. The trading robot program decides whether to buy or sell certain assets. The speed of reaction to market changes, allows the trading robot to make much more transactions, respectively, potentially bring greater profits and reduce losses. [nerd] algorithmic-trading-forex.jpg Let\u0027s return to the main task of the trading robot. We can say that the task of a trading robot to simplify trading for a trader is not the main one. The main task of the trading robot is to be able to implement through programming trading algorithms that are difficult or impossible to implement in manual trading. Simply put, a trading robot is a set sequence of actions for making a trade. From the total mass of trading robots, it is necessary to distinguish three main groups that differ in the algorithm of work or the type of strategy. Trend (directional) or directional; Countertrend; Arbitral. trade-robot-strategy.jpg Let us consider in more detail the features of each type of trading robots. Trend or directional robots. The purpose of the robot is the fastest response to the trend of the market, in other words to track in which direction the market has turned. Depending on the direction, the trading robot automatically opens a position either by selling or buying. Accordingly, if the market changes its direction, the trading robot performs the opposite action as quickly as possible, opening a position. Countertrend trading robots. Their goal is totrack price rollbacks. This trading robot monitors price rollbacks occurring in the flat position of the market and places orders based on the established algorithm. Arbitrage trading robot. This trading robot is almost the most popular type. A trading robot such as \"Edward\", for example, makes a profit by determining price differences between similar or identical instruments in different markets. In fact, he buys in one market, sells in another, compensating for the difference and making a profit. trade-robot-api.png Another way is the separation of robots: Candlestick. These are trading robots that use candlestick datato determine signals for placing orders. Indicator. These robots use indicator data to open an order. Let\u0027s talk about building a trading robot. The very writing of program code is not a difficult task, reduced to the knowledge of programming languages. It is much more difficult to find the right way to create a trading algorithm on the basis of which a trading robot is created. Today, up to 50% of transactions on trading platforms are made by trading robots. Trading robots are rightfully considered one of the most reliable and effective trading tools. There\u0027s an explanation : Trading robot simplifies the work of transactions with a large volume of the lot, dividing the application into smaller parts and making transactions in parts; *Trading robot reduces the labor of the trader, making trading operations automatically. This contributes to an increase in the volume of transactions, increase the profits that trade brings, and, importantly, reduces the possible loss; While remaining automatic, the trading robot can always be switched to manual mode, that is, it remains completely under the control of its owner; A huge list of tools and methods that can be used by a trading robot, allow us to say that the trading robot makes it possible to realize the most complex mathematical problems for trading; The trading robot does not have the criterion of emotionality, in fact, it soberly operates its inherent mechanism. Does not panic in a stressful situation.* HFT-trade-forex.jpg When analyzing trading robots, a trader must choose the right path for himself, on the basis of which he will be able to choose a robot for himself. A trader should understand that a trading robot is not decision for 100% success. In addition to the trader, it is important to know the platform for the implementation of such trading robots. There are quite a lot of them (TSlab, S#.Designer). holy-grail-forex.jpg exchange-trade-strategy.png Summing up, we can say that the trading robot is reliable and convenient functionality in the arms of the trader, the most important thing is to use it correctly when conducting exchange trading.
Before you start talking about algo trading, you need to define it. So, what is algo trading? There is a different definition of this concept, only its essence and the principles on which the work is based remain unchanged. Algo trading-trading, which takes place through a fully automated algorithm, which prescribes the trader, the execution of which potentially brings profit to the trader. In fact, it is a program that carries a sequence of actions. [nerd] trading_robot.jpg The trader himself makes and determines the sequence of applications for purchase or sale, indicating the order of management of his funds. The money management conditions set by the trader as program parameters determine the necessary or optimal size of investments, for example, purchased securities. Similarly, this system manages the allowable loss or risk at which the size of the loss will be acceptable. In this case, risk management is performed by setting the stop loss algorithm. The absence of feelings and emotions in the algorithmic programallows to avoid nervous breakdowns or other emotional outbursts. This is certainly a plus, since the work of a trader often occurs on the verge of nervous tension, and sometimes a person can lose his nerves, which will entail a rash step and as a consequence of loss. At the same time, the trader has the opportunityto intervene in the work of the trading strategy, making the necessary adjustments. [laugh] Thetask of algo trading is the exact execution of the instructions of its system. Often in some sources you can see the name of mechanical trading systems (MTS), but algo trading is the most common name. In fact, the algorithm is \" mechanically \" executed by the program, excluding judgments about the market situation and the state of various instruments. I must say that the \"mechanical\" system is not always automated. The latter, unlike the first, independently makes transactions, with the participation of a person is not required or minimized. trade_systems.jpg Experts note that the algorithmic trading consists of two stages. Let\u0027s take a closer look at them. At the level of the first stage, the trader creates his \"mechanical\" strategy. After creation, the process oftesting on the market data, and subsequently, when the strategy reaches the desired level of potential profit, testing goes into real time or real trading. Note that the last stage takes place when using minimal capital, as it is testing, and some traders prefer it to \"trade on paper\". At the same time, profitability is not the only criterion that gives an assessment of the efficiency of the strategy. Let\u0027s talk about the means of creating and then testing the created strategies. Such tools may include special programs designed for technical analysis of algorithmic systems created. The most famous are: carried out using specialized programs: MetaStock, S#.Designer, Wealth-Lab, Tslab and others. The strategy program is written in various programming languages such as: C#, C++, LUAand others. The recorded algorithm makes it possible to use the downloaded market datato test the strategy, and in the future allows you to place orders in the programs used for trading. It is worth noting that strategies can be created as in constructor programs for example: S#.Designer, Tslab, in which the strategy is created on the basis of cubes, and the program is a scheme, and in programs where direct programming is used MetaStock, Wealth-Lab, including using ready-made libraries, such as S#.API. Thesecond stage of development begins after the trader\u0027s strategy has been fully tested and is ready for real trading. The second stage is implemented approach strategy or a trading robot that will trade the set algorithm or the trader selects the manual bidding process on a signal received from created strategy. The trader connects the export of stock market data obtained in real time to the program in which his trading strategy is created. The strategy processes the data and based on the result, sends a signal to submit applications. Again, what alarm action strategy can be done manually by a trader, and can be delegated to a trading robot, which places bids automatically according to the algorithm, for example in systems like S#.Designer, MT4, TSlab. Trade_Strategy.jpg It should be remembered that the creation of a trading robot does not relieve the trader of responsibility for the trade itself. The trader must constantly monitor the work of his robot, edit the terms of transactions according to the changing situation in the market. [nerd] Should be said, when working on long time frames, comparable, for example, with an hour, the automation of placing orders may disappear, since the trader is able to correlate and manage the trade on long periods. Any chosen direction of algo trading can undoubtedly bring profit to the trader, but the approach should be deep, not just at the level of the chosen algorithm, it is necessary to take into account the tools on which the trade will be conducted, the software. An important rule is analysis and testing, it always minimizes your losses.