The idea behind trading automation.

Abstract:

Using automation processes and technical skills, the idea is to develop a modularized, configurable, and environment aware trading system that can adapt to different currencies, news, and market trends without or with little human interaction.

The problem:

Automated trading is the same as manual trading, leaving the feelings out of the equation. Followed by intuition, computers don’t have feelings or intuition; that is the whole idea’s biggest downside. So, to begin with, we must break the problem into pieces, thinking about the best way to get accurate signals from the market, running them by our own “automated market entry proofing,” avoiding wrong signals and leaving only the safe ones.

Understanding how we can make it work:

Using our technical skills in math, programming, and tests, we can produce a system aware of news, wrong long and short market entries. Taking advantage of those brokers who widen the spread during news time, avoiding entering the market on those moments.

We are using trading strategies as BEP (Break-Even Point), which will allow us to step back on our initial entry or lot size. And according to the trades, we have opened running them through the system, deciding if the stop loss and take profits are well fitted and if the sudden market change happened being able to step away without losses.

As you may or may not know, in Forex, you always lose. Every time you win, someone else is losing. Vice versa, so we have to try to do a great job on money management, and later on, trying to show or teach the computer the best well-known methods to step in or out of market-defining possible conditions, or giving the system a way to understand either good or bad moments.

How this expert solves the problem:

We are making this expert with all the knowledge we have on Forex, plus technical and mathematical skills.  

Dividing the problem on the following steps:

1. Shutdown (System that will make the expert stop trading and once all trades are close, shutdown completely)
2. Emergency Shut Down (Close everything assuming losses).
3. Money Management (According to how much money you’re investing, calculating your risk choose the best lot sizes).
4. Lot Adjustment: Adjust lots manually if you change from one broker or another or don’t want money management.
5. Entry Signals (Configure the way according to the pair to be traded what signals work best or are more accurate).
6. Exit Trades: (Configure how opened trades will or should exit, setting stop losses, take profits, monitoring, etc.)
7. Trade Monitor: (Configure what will be monitored from opened trades).
8. Display: (Configure what is displayed on the screen when on automated trading).
9. Alerts: (Configure when a trader should be alerted).