4 Points about How to Develop the Best Profitable Algorithmic Strategy
Developing your own best profitable Algorithmic strategy robot in the forex market will be an one of your pay-up decision making that you have made. But, to make this decision a really good and very profitable, you have to know how to do it.
First of all, you have to decide if you want the full automatic or semi automatic pilot Algorithmic-HFT. From my previous experience to build the full automatic AutoPilot, who have to invest a lot of money and it will very expensive, let say about 400,000 $. It is not surprisingly to me because the developing of full Automatic will take about 4 years and a lot of programming and backtesting and the market salary for an expert software engineer is about 100,000 $ yearly !
Therefore, as a day traders, you could just think about developing the semi-automatic AutoPilot robot. For doing it well you have to think about these 4 points :
1. Currencies Pairs – which pair or pairs would we want to trade on ? for example GBP/USD has much more volatile than the EUR/USD pair and therefore we have to calculate with different leverage and margin.
2. Time and the Market – will we want that the AutoPilot will trade when the market is quiet ? or will we want that the AutoPilot will trade for us when the market is vividly ? The answer will give us different parameters to conclude and code in the Algorithmic strategy robot.
3. Indicators – this point i think is the most crucial about our strategy decision making. Indicators are giving us the entry and exit point from any strategy we will develop. Therefore we have to understand the meaning of the indicators, which will be inside our developing strategy. It is worth to advice with an expert along the strategy developing.
4. Money Management and the Risk – well this is the last but not least – i mean when the money management is correctly programmed into the strategy we will get the lowest possible risk about a specific gain. It means you will have to find the local minima risk/gain function.
In the end, the backtesting… here you will find the most best suitable along the history for the indicators’s parameters. It makes our strategy more robust to the local minima risk/gain function, which you have just found. Of course the best way to build your own winning strategy is to rent the best Quantitative Analyst expert in the market.