The Top 3 Key Features That Every Algorithmic Forex Trading System Should Have
Algorithmic forex trading systems are becoming increasingly popular on the internet as well as increasingly complicated and robust in terms of their performance and what they are capable of. If you want to succeed in the field of automated currency trading then it is important for you to understand all of the details that are important when it comes to evaluating the effectiveness of a particular trading system or when it comes to developing your own trading system. Here are three of the most important features that should be included in any automated trading system in order to achieve maximum results.
Clearly Defined Money Management Rules
This is very important because money management principles when they are applied to algorithmic trading systems are not necessarily the same as applying money management rules to manual forex trading. There are a number of things you can do with an automated trading system that cannot be accomplished with manual trading such as achieving compound growth in terms of the number of lots used per trade, based on a factor of a certain designated percentage of your total account balance. When you combine this principle with a forex broker that offers fractional lots then you can really see how the potential growth can outpace anything that can be accomplished by manual trading.
The Ability To Turn Hedging On Or Off
One of the most important considerations when you are evaluating the viability of an automated trading system is whether that system is based on currency hedging or not, because currently all forex brokers that are based in the United States are required to comply with a policy called FIFO, or first-in first-out. This means that if your algorithmic trading system depends on opening multiple positions in different directions then there are certain brokers that will not allow your trading system to run due to their financial regulations.
A Separate Distinct Magic Number
Every algorithmic trading system has a number of parameters and settings that can be adjusted by the trader, and one of the most important features is called the magic number, which is a unique number for the specific system you are running. This number must be unique for every single trading system that you have running, and it resembles a bar code in the sense that it is a separate and distinct value that allows the software to designate separate instances of different algorithms. By making sure that the automated forex trading system that you are evaluating has these distinct features you can make sure that you maximize your opportunities for success.
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