The Good News About Forex Automated Trading

I’ve received positive and negative feedback from a lot of you who have experienced forex automation. I don’t want to talk about the bad news quite yet. So what’s the good? Unfortunately, the good news mostly involves available API’s for developing your system and brokers that support automation. I haven’t heard of many success stories relating to forex automated trading. Here are some recommended API’s and brokers and some comments on whether I will explore them further.

Interactive Brokers has a free C++, Java, and .NET API. The C++ API does not come highly recommended from the one trader I received an email from but the API’s are free. He also goes on to say that, “Interactive Brokers is also good from a fund safety point of view, given they are one of the bigger brokerages. Commission is very cheap and they basically offer anything you can trade.” This seems to be the best option I’ve seen and definitely worth exploring further.

Another trader recommended Varengold Bank for trading via Metatrader. He says that he has “yet to find anything to come close to their service utilizing the Metatrader platform.” Varengold Bank is a German bank and has regulatory oversight by the German Federal Financial Services Supervisory Agency. Unfortunately I don’t have a lot of experience with brokers or regulatory agencies outside of the United States yet this may be worth exploring if Metatrader is the platform of choice.

Interbankfx with Metatrader comes recommended also. A trader who just recently started using IBFX states, “I just started live automated trading this week… They seem to be very EA friendly and come highly recommended.”

MB Trader comes recommended due to their “well documented API and you can develop and test your system on their demo servers for free. MB Trading is a relatively well-known firm inside the United States so this could be yet another option worth exploring.

Ninja trader comes recommended and could be a “good option that allows for testing and development for free.” It’s also broker independent supporting Gain Capital, Interactive Brokers, MB Trading, and more. I like options and with the multiple brokerage support, I may look into Ninja Trader further.

Other options include FXCM’s FSS or Forex system selector. Based on what I’ve read though, you really can’t design your own system. You can select from their own designed forex systems. I don’t see the benefit to this at all.

FXTraderLink provides a facility for automatically trading your account based on signals from a portfolio of signal providers. I don’t want to rely on a signal provider to “provide” me with wealth plus I don’t trust them. I’m not a big fan.

I haven’t even begun to explore any of these options yet but I will regardless of the bad news I’ve received from others. Is it possible to make money with forex automation? Unfortunately I cannot answer this. I’ve had a tough enough time making money manually trading but at this point, I’d like to try something else.

Popularity: 76%

FXCM to Offer Metatrader

This came as a complete surprise to me but I absolutely welcome it. FXCM announces they will offer Metatrader in 2008.

FXCM plans to introduce the MetaTrader online trading platform in the beginning of 2008.Because many traders have expressed an interest in this trading platform, we would like to keep them informed of our progress. Please complete the form below if you would like us to send you information about the upcoming release of MetaTrader.

http://www.fxcm.com/metatrader-platform.jsp

Popularity: 9%

2007 Automated Trading Championship

The 2007 Automated Trading Championship
is coming to an end soon and the MetaQuotes Software Corp., ODL
Securities, Alpari (UK) Ltd., FXDD, TRADERS’ journal sponsored event
has a clear-cut winner.  Trader, Olexandr Topchylo from the Ukraine has
an equity balance of about $89,000.  The second best trader is way
behind at $34,600.  Topchylo has a candidates of science in Mathematics
and Physics and if you're interested, you can read an interview with
him at http://championship.mql4.com/2007/news/303.  Too bad he doesn't reveal his EA or algorithm. 

Popularity: 6%

Help! Need New Broker

I'm posting this for a loyal visitor who is tired of Oanda's spread hikes.  I too have had issues with their spread hikes mostly during economic releases out of England.  Anyway, he's looking for feedback on any Metatrader brokers that others are using for live trading.  I personally have no experience with any Metatrader brokers.  If you do, please post a comment on your experiences.   

Popularity: 6%

Trading Range Indicator

I've found this text-based trading range indicator to be quite valuable in my technical analysis.  Here is a picture of it on my charts:

 

 

This shows the daily range in pips for today, yesterday, the average over the previous 5 days, 10 days, and 20 days.   It also shows the stop losses you might use if you want to set it at 1/2 or 3/4 of the average daily range.  

It's particularly useful in guessing whether a momentum trade has the potential to continue or not.

If your interested in checking it out for Metatrader, you can download it here.

Forex ADR indicator 28/12/2006,10:30 13.35 Kb.

Popularity: 6%

Backtesting Data

I figured I'd mention this before I forget.  I'm back to doing backtesting of a couple of strategies including the H-system in an attempt to find this tradeable on another currency pair other than the GBP/USD.  I've been learning to do more backtesting via Metatrader but I still like writing my own PERL backtesting scripts because it gives me unlimited flexibility.  Anyway, I stumbled upon Alpari's data bank which provides Daily and 1 minute data for multiple currency pairs dating back to June of 2004.  It comes in multiple formats such as Metatrader, XPO, and Metastock so you can use it just about anywhere.  You can find the data bank at http://www.alpari-idc.com/en/dc/databank.php

Popularity: 4%

Metastock Forex Brokers

After using paid charting packages such as eSignal, Intellicharts, Metastock, and Xtick, I just don't see a compelling reason to NOT use the freely available Metatrader.  I've become semi comfortable with Metatrader except that I just haven't taken the time to learn to program in MQL4 which is short for Metaquotes Language 4.  Just like my conversation about brokers yesterday, there is no perfect charting solution.  You just have to choose which have the features that you need most.  I will continue to use Metatrader not only because it is free but because the other paid packages don't provide me with anything more.

There are a lot of brokers out there that use the Metatrader server trading platform.  Why? One reason may be because they don't have to spend the time and money to develop their own.  You simply download the Metatrader client terminal and connect to any broker that publicly allows trading through their Metatrader trading platform.  Brokers are providing their own price feed so one of the things that will be different within the Metatrader client terminal between brokers are the prices.  So if you decide to use Alpari as your broker, you can do so by logging into their server from within Metatrader.  If you then decide to switch to Interbank, the only change are the login and the prices.  If you switch, the prices will re-populate with that particular broker's price data.  In addition to these changes, the time on your charts will also change which is the one annoying thing about Metatrader.  If Alpari is at time zone GMT and Interbank at GMT -3, this will be reflected on your charts.  The time in Metatrader is not based on your local computers time.  

This finally brings me to the reason for this post.  There are no major forex brokers that use the Metatrader platform but I wish there were because the ability to trade directly from within the platform could be its biggest strength.  Instead of purchasing an expensive API, you can automate your trades from Metatrader.  The H-system trading system I've been using for the past 3-4 weeks is a perfect candidate.  I've been sleep deprived during this time because a lot of the trades are opened during the European session.  I've seen a lot of advertising from Interbank FX I just don't know how much I could trust a small broker with my money.  Does anyone have any experiences with Metatrader platform brokers?  I'll certainly be looking into this because I just cannot ignore the power that Metatrader can have when combined with a live account.

Popularity: 6%

Automated Trading Championship

MetaQuotes Software dropped me an email today to let me know that they are having an automated trading championship starting October 1st.  The main objective of this Championship is to raise the popularity of Automated Trading.  If you are interested in programming custom experts in Metatrader, this is for you.  I am thinking about creating an expert so I can participate. 

Your expert will trade automatically with fake money and at the end of 3 months, the expert that has the most profit wins the following:

1st prize: $40,000

2nd prize:$25,000

3rd prize: $15,000

This is not a bad chunk of change.   

To read more, go to http://championship.mql4.com/  

Popularity: 4%

Squeeze and Metatrader Indicators

My mailbox gets flooded with requests for the eSignal indicator I wrote that emulates the TTM Squeeze indicator.  The TTM Squeeze indicator is offered for sale by John Carter on his website at http://www.tradethemarkets.com .  My version is free but instead of responding to every email I get, I've added a new menu to the website where it is available for download.  In addition, I have added about 300 metatrader indicators for download.  This will be a repository for all to share indicators.  As long as you are a registered user, you can upload indicators.

To download indicators, go to the right menu item titled, "Metatrader Indicators" or visit:

http://www.forexproject.com/option,com_docman/Itemid,203/

To download the Squeeze indicator, follow the same link but click eSignal Indicators. 

For those of you that ask whether this squeeze indicator can be used for metatrader or tradestation or any other platform, the answer is no.  It can only be used for eSignal.

I am in the process of writing a squeeze indicator for metatrader but I am still learning the MQL language so it may be a while until I release it.  I did just finish a simple indicator that plots 5 EMA's that John Carter uses on all of his charts so if this is of interest, download here:

http://www.forexproject.com/option,com_docman/task,doc_download/gid,299/Itemid,203/  

Popularity: 8%

Forex Charting from Esignal to Metatrader

I mentioned last week that I was ridding myself of Esignal due to price, performance, and features.  Esignal was costing me about $160 per month and yet I found that it was very slow and the features they offered just weren't anything special.  I compare Esignal to Microsoft.  The development process is very slow probably due to bloated code and new features make their way into the application once every two years.  

I've found the alternatives out there just flat out better than esignal and cheaper.  I hear a lot about Xtick because it's cheaper, $85 a month and features are added when requested.  The downside is that there isn't any backtesting functionality and no way to develop custom indicators. 

I've found Metatrader to be unbelievable.  First, it's free. Second, they have backtesting functionality, and third, a language to develop experts and indicators.  It is also very fast.  But at the expense of speed, there is a downside.  There are no 10 minute charts and no 180 minute charts.  In fact, you can only select from 1 min, 5 min, 15 min, 30 min, 1 hour, 4 hour, daily, weekly, and monthly.  Their database probably contains data specific to each time period and therefore you cannot just select an arbitrary time period.  This is still sufficient for most people though and like I said, since it's free, you just cannot beat it.  

One thing that I've heard from many people is that it is very beneficial to use charting software that has a feed from the broker you make trades with especially if you are trading the shorter term charts.  If I am trading short-term, I use FXCM Power Charts because they are very good "web" charts and the feed is directly from FXCM (my broker.)  

Popularity: 4%