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Fusing Automated Trading System with Mechanical Methods

We find automated trading systems very unique as compared to mechanical trading. The forex market can be monitored using an automated trading system, with the system being absolutely disciplined to a set of rules that are core to the system; making it devoid of greed, fear and emotions when it makes trade decisions. There is a strict adherence to money management rules as defined by the user; well I must say that the automated would only trade accurately if the creator of the system does his homework properly in the design of the automated trading system.

Some of the pitfalls we experience in a trading system are those depicted in its basic principles, usually the strength of a system can also assume its weakness. Automated trading systems are not able to analyze the market in the same manner humans do, but these trading methods can not initiate trade positions the way humans do.  What trading robots do is that they initiate trading positions based on set rules and we find humans not doing this.

We find a lot of traders failing in their bid to become successful investors, with only a small percentage being able to catch in on the market trends and make money off the business. The winning figures varies based on the source, usually it falls between 5% – 8% and at the same time a slim number of automated trading systems do survive the market, with their rule-sets becoming obsolete and investors would start experiencing losses. The best model is a combination of a seasoned trader and that of unique trading system to offer that superior blend.

This is one of the underlying reasons why we find a whole lot of research in the area of algorithmic trading. Automated trading systems can be improved with the help of Genetic Programming and Neural Networking in a bid to improve the systems performance. Some of these early conclusions support the notion of using an automated forex trading system.

Putting all of these together would mean that automated trading systems does in a lot of ways aid humans to tackle the problems of understanding system designs and effectively being able to create ground breaking forex trading systems that can utilize the technologies necessary for forecasting the market trend adequately.

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