Algorithmic and high-frequency trading – the future of foreign exchange market analysis?

Algorithmic trading

A program, or algorithm, is simply the use of computer programs to enter a trading order, where a computer algorithm calculates inputs such as time, price, and quantity of orders to be placed, and these systems are designed to work without people. intervention.

They can be long-term or short-term, but most are short-term and strive to make quick money normally within a day. The logic behind them is that they can detect price differences and profit from them and unlike humans there are not subject to emotions and save operator time while working automatically.

HRT high frequency trading

The term High-Frequency Trading (HFT) basically means “trading with a system that is firmly focused on execution speed”. The HFT system can decide to execute and order in less than a second and is used by many institutions. The idea is to get an order in front of the crowd and take advantage of the price differences and make money on them. The idea is not only to execute orders quickly, but on a large scale, so that the system can quickly liquidate trade. All stores usually close in minutes or hours and no positions are usually held overnight.

Doesn’t the future of trade sound so impressive?

Well, as an experienced trader, I would say that people have been trying to beat the market since the trade started and no one has succeeded yet, and the reason is obvious that the markets are not switching to mathematical models and the computer cannot think it can only react. The computer can only react to change, not anticipate it, so a simple system will work better than a sophisticated point-and-shoot algorithm.

New names for Forex strategy losses

Algorithmic trading is just another word for robot trading that has somewhat lost its flavor due to the huge amount of systems being sold for public consumption with fake records losing money.

Even funnier is high-frequency Forex trading, which emphasizes nano-second orders to beat the market and make quick profits. All this makes the transaction costs so high that there is no chance of making money. Wasn’t that once called scalping or day trading? Of course, these names are not the taste of the month either, due to the amount of systems that were sold and the money lost, so retailers must find a new name in order to attract the imagination of the public.

Winning the market with the help of computers is nothing new, and algorithmic and high-frequency Forex trading are just the latest hype that claims to beat the market, but sees users lose.

How To Win At Forex Trading

If you want to win in Forex trading, go the old-fashioned way of making money, and that is to learn the basics that are easy to learn, then think for yourself and you will be able to enjoy the success of Forex trading.