subject: Why You Should Be Algorithm Trading To Make The Money That You Want [print this page] Algorithm trading refers to using an algorithmic program to analyze real time market data and from that devise accurate depictions of what the market will do next in certain forex pairs. This enables you to trade effectively without having to devote the time to analytics yourself.
As I said, some traders turn to algorithm trading because they do not have a great deal of time to devote to analytics themselves. As the market moves incredibly fast and anything could happen at any one moment to affect the entire spectrum, watching the market is like a full time job. This is why so many brokerage houses exist to do that work for you.
Algorithm trading has now gotten to the point that it has jumped ahead of most brokers where the best of these programs react more quickly and effectively than any human can or could. They follow trends to the number, meaning that they rely exclusively on up to date around the clock analyzed market data and nothing else in determining how they control your campaign. Loosely put, if a negative trend begins, the program sells, and if a positive trend begins, the program buys, and this is all with almost an anal level of attention and scrutiny.
This also means that there are no emotions involved, whatsoever, which is paramount to your success. If you've been riding a successful trade for a long time but then out of nowhere the market changes out of your favor, you need to trade away the now faulty investment.
Even if its just a small trend at first, it's likely that that negative trend will grow and you will continue to hemorrhage money while all the while you're hoping that the market will change back in your favor. Failure to control your emotions in trading is deadly, and a major reason as to why so many traders fail or at the very least suffer a great deal of losses that they need not suffer.
by: Max Branner
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