Algorithmic Trading: What is it?
Algorithmic trading, also known as algo trading, is a automated system that utilizes advanced mathematical models and formulas to make instant decisions with right timing. Algo trading involves the use of computer programs (expert advisors) to execute proven trading strategies for optimal results.
What strategies are used?
Expert Advisor can use every known strategy in the market. Also there can be implemented mathematical formulas which can earn money even without strategy. It’s more risky though. But if the balance is found the result should be there. However, one of the most popular strategies used in expert advisors is scalping. Scalpers profit small amount of pips on every trade numerous times a day. Average trade time is less than an hour. May be minute or even seconds. Some of the other strategies are: trend following, arbitrage, mean reversion, etc.
Can I make money with expert advisors?
Definitely! Proper Expert Advisor can make money year after year. The problem is that on the market there are lots of scammers who claims that they possess “The Holy Grail” of expert advisors. There is no such thing as 100% winning or risk free strategy. On average one EA can profit from 10 to 70% per year depending on the year and EA of course. That is estimated profits on low risk levels for the account. If the user has good strategy and diversified assets on many accounts with different risk profile, algorithmic trading can be very profitable and almost risk free.
Is it difficult for novice traders?
It shouldn’t be. Trading with expert advisors is as simple as it can be, because the algorithm is already imported and backtested over the years. User should make the backtest for himself in order to prove credibility of the product and adjust input parameters if needed. That’s all. One simple push and the account start to grow!