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How Forex Data Helps Draw Automated Strategies

Shridhar G Vatharkar
How Forex Data Helps Draw Automated Strategies

Evolving technology brings enormous tools to your fingertips and helps you make informed decisions. Automated trading platforms are gaining popularity in the forex trading landscape. Professional developers can set instructions based on the timing, prices, mathematical models, and quantity and make the automated trading system execute the trades at the correct instance.

Accurate, curated, and reliable forex data is crucial for making any automated trading system consistently successful. The article takes you through the technicalities of automated trading strategies and helps you understand the significance of unbiased forex data for its success.

Building Automated Strategies & Trading Platforms

Developers and service providers build automated trading systems to eliminate:

  • The need for manual scanning of markets,
  • Manually picking the right trading opportunities, and
  • The influence of emotions in trading decisions.

It is practical to create automated trading systems using forex data API from reputed data vendor and build the platform around it. Forex trading experts conduct thorough market analysis and mathematical modelling. They utilize their in-depth knowledge to derive automated strategies.

A rule-oriented plan penned down as a flowchart and subsequent coding based on quantifiable forex price data enables developers to set buy and sell orders.

Then, they define the timeframe and trading frequency. After this initial set-up, experts perform back-testing on historical data. They verify if their drawn trading strategies work on the previous prices.

Finally, they connect the algorithm to a live demo trading account and verify if the trading strategies and algorithm synchronize well in live conditions.

Importance of Indicators in Automated Strategies

Indicators help predict the ‘turning points,’ where the trends change and move in other directions. These instances can be the best trading opportunities. Indicators are mathematically derived and denoted through lines on the charts. Traders can analyze past price movements to try and anticipate future price movements. We can broadly classify the technical indicators as:

Overlays: These technical indicators use the same scale as the prices. You can see them plotted above the price bars in a chart. Ex: Bollinger Bands, Simple Moving Averages.

Oscillators: These are technical indicators oscillating between a local minimum and maximum. You can see them plotted above or below a price chart. Ex: RSI, MACD, Stochastic oscillator.

Common Automated Trading Strategies

Trend-based Strategy

The algorithm initiates trades as desirable trends occur. The strategy may rely on following the trend in Moving Averages, Channel Breakouts, and Price Movements without prediction or forecast.

Strategies based on Mathematical Modelling

Sophisticated mathematics calculates the probability of events to help traders profit or avoid losses. These are proven mathematical models for trading on options and the underlying security. Ex: Delta-Neutral Trading Strategy.

Mean Reversion

The strategy works on the concept that currency prices settle to their mean or average value after ups and downs. Researchers set the algorithm to execute trades as the currency value crosses its predefined range.

Arbitrage Opportunities

This strategy involves buying a dual-listed currency at a lower price in one market and selling it at a higher price in another market. Traders gain through the difference in price or arbitrage.

Index Fund Rebalancing

Traders can realign the weightings of assets by frequently buying and selling those assets to retain the original asset allocation. The strategy aims at keeping the composition of the index balanced over time.

Leveraging Technical Indicators to Draw Trading Strategies

Expert technical forex market data analysts work out trading strategies based on trading style, risk tolerance, and short-term or long-term goals. They pick relevant technical indicators to execute trades per their strategies.

Developers then pour their coding skills into the automated trading solutions to place the indicators right. Thus, the system trades on the user’s behalf whenever it meets certain conditions. In this process, unbiased forex data remains ultimately critical for the success of automated trading strategies.

Forex Market Data: The Most Crucial Aspect of Automated Strategies

The success of various automated strategies and systems for forex trading relies on the best-quality forex data. Automated trading system makers and forex market experts require accurate, aggregated, and trustworthy forex market data for creating trading algorithms.

Deriving algorithms and calculating technical indicators based on reliable forex data are critical to building automated strategies. Inferior or cheap forex data will affect technical analysis and trading decisions. Integrating poor forex data into your automated trading system will harm your users’ trading success.

Therefore, with your expertise in technical analysis, drawing profitable strategies, and setting technical indicators, it is vital to acquire forex market data from the most reliable source.

How to Get Accurate and Reliable Forex Data?

It is essential to work with trusted data providers offering reliable, curated, and accurate forex market data for many years. TraderMade empower traders and analyzers with easy-to-understand forex data. Similarly, they enable fintech companies to build futuristic forex trading solutions through their forex data API.

Reliable data vendors deliver the best-quality forex data in various methods to suit your needs. Developers can get their API with SDK for trending programming languages. They also offer WebSockets for access to real-time data. Similarly, traders and technical analysts can get forex data in Excel and downloadable CSV files. You can conveniently obtain:

  • Historical prices
  • Live-streaming prices
  • OHLC data
  • Intraday prices
  • EOD prices and more

Please sign-up to get instant access to their API and start building forex automated strategy-based applications for the future!

When you have the best-quality forex data, you can use it for further technical analysis and drawing trading strategies. You can then calculate technical indicators and set them in your trading system.

Rely on the Best

TraderMade empower your technical analysis and automated strategies by delivering forex data of paramount quality. You can add data retrieval features to your forex trading apps and websites by integrating their forex data API. Help your users make informed trading decisions by choosing them as your forex data vendor to obtain unbiased, aggregated, accurate, and reliable forex data.

Shridhar G Vatharkar
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