The forex market is the world's largest international currency trading market operating non-stop during the working week.

1. Algorithmic Forex Trading

2. Algorithmic Forex trading is a
logical result of combining
technical analysis with computer
programs.

3. After all, if you always make the
same trade under the same
circumstances so why not
program the computer to make
the trades? In algorithmic Forex
trading the computer follows the
price of one currency pair versus
another.

4. It tracks any data that you want it
to track and then makes trades
under the circumstances that you
tell it to in the programming.
Sounds like it should be profitable,
right? Certainly a lot of big trading
houses use algorithmic Forex
trading.

5. Should you? With profit from
changes in foreign currency rates
as our goal read more about
algorithmic Forex trading.

6. An Efficient Way to Trade
Currencies

7. To the extent that algorithmic
Forex trading always leads to
profits it is a great idea. You can
simply pick the Forex pair, select
the trading program, and walk
away. If the program is smart
enough perhaps you let it pick the
currency pair.

8. If you tell the program when to
start and when to stop and when
to get out if there are problems
algorithmic Forex trading takes
fear and greed out of the picture
and could lead to nice profits.

9. To the degree that you keep it
short and sweet, picking the most
profitable Forex pair and briefly
trading it could result in reliable
profits. Now let us look at the dark
side of algorithmic Forex trading.

10. How Much Information Do You
Need to Make a Profit?

11. One of the reasons that
programmed trading is usually
limited to large trading houses is
that you need a lot of information
about a lot of things to routinely
profit from algorithmic Forex
trading.

12. The business of picking a pair to
trade can be simply one of
technical analysis or it may require
picking information out of the
news for analysis.

13. Analyzing text in many languages
takes the level of difficulty up a
couple of notches and puts this out
of the range of the average trader.

14. How Fast to Do You Have to
Process Data to Avoid a
Disaster?

15. A really fast computer that is well
programmed can make decisions
and place trades in tiny fractions
of a second. Being in second place
in this race to place trades can
spell the difference between
success and failure.

16. Having staff on hand to make
changes in computer code can be
invaluable and is not a service that
is available to the average trader.
Speed is often of the essence when
reacting to market changes, which
is the province of algorithmic
Forex trading.

17. This puts the average trader at a
constant disadvantage if he or she
chooses to compete on the basis of
reaction time or data processing
ability.

18. What Are Your Options?

19. Despite our comments above
about coming in second, technical
trading still works but so does
sound fundamental analysis. If you
can see a change in the market
coming, you can buy Forex
options, puts or calls, on one
currency using another.

20. This gives you the right to exercise
the contract and make a profit
from your good judgment and
forget about split second execution
or massive processing of data.