Types Of Mechanical Trading Systems.
There are three basic types of trading systems based on individual or joint trading ideas (rules) that can be recommended for trading:
Following the trend. These systems have simple rules or, using some of the rules, appreciate the dynamics of the market: if the market moves up, down or flat, thus determining the direction of the trend. As the rules of the analysis of trends it can be used trend indicators and filters of trends.
The systems based on the break of support or resistance. Such systems give a signal in the direction of the breakout after a change of the trend or after a flat trend. The Systems based on breakthrough are least of all computerized, by virtue of an artificial definition of levels and involve the use of a subjective approach that actually makes this kind of systems in the strategy solving by a personal touch.
Price corridor – is a system designed specifically to make a profit during periods when the market is in some range of prices. This kind of systems is more computerized, due to its greater ability to specify mathematical formulas and automation environment for the alarm.
Many professional traders of institutions, especially the mock-makers have a series of systems that reflect each of these areas in order to profit from trading in the market for any of the current trend. It is very important to have a suitable type of system for each state of the market as trending systems lead to a constant pulling in flat trends, and systems based on the breakdown tend to err in correcting that in both cases leads to a significant loss of capital and nervous overload
According to the method of application (use) MTS are: mechanical robots, mechanical and semi-mechanical.
Mechanical trading systems (MTS) are computer programs that using price data define: at what price and how much you should buy / sell securities. At the core of MTS there is a certain system of rules or ideas which effectiveness has been tested on the price history. Function of a man is in support of performance of the trading system: to start in time, maintain visual inspection and analysis of the correctness of the MTS, transfer orders issued by MTS in the real trading system. A person does not affect the adoption of commercial solutions, but may stop the MTS at any time.
Mechanical trading system- robots – are computer programs with automatic quotations in real trading system. A person supports performance of the trading system: runs in time, leads visual inspection and analysis of the correctness of the MTS.
Semi-mechanical trading systems – differ from MTS that a person can influence the investment decision. This is due to the impossibility to computerize rules or ideas underlying the trading system.
As in every other niche of our life foreign exchange market needs some knowledge.
Of course, one can start forex investment and be quite successful in it. However sooner or later the losses will come. It is precisely when you might think “Why didn’t I start with a nice forex trading education?”
This does not imply that after reading even the top materials you will start making money, but this knowledge will save you from lots of troubles. And even if you make up your mind to get the help of a managed forex trading service, still you will be able to make a much wiser decision.
And some general tips – today the web technologies give you a truly unique chance to choose what you want at the best terms which are available on the market. Strange, but most of the people don’t use this chance. In real practice it means that you must use all the tools of today to get the info that you need.
Search Google and other search engines. Visit social networks and have a look on the accounts that are relevant to your topic. Go to the niche forums and join the online discussion. All this will help you to create a true vision of this market. Thus, giving you a real chance to make a smart and nicely balanced decision.
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