Trade Automation software as its commonly referred to is a process where a computer algorithm executes a pre-defined trading strategy based on a specific set of rules. The concept of Trade Automation software isn’t a new thing. Algorithmic systems have been around for a number of years, although these were usually only available to institutional level investors and traders with pockets deep enough to afford the high costs associated with the strategy.
Trade Automation software takes human emotion out of the equation, executing trades based on the rules and criteria in the trading strategy.
Exponential developments in computer processing power and network speeds have brought the hardware available well within reach of retail traders, but there was still one missing ingredient. The actual algorithms needed to make the whole process work.
One of the newest systems available today is the TradeWorks cloud based software. More than a simple software, TradeWorks is a complete trading system. From creating your own strategies and to back-testing and applying these strategies in a trading environment.
TradeWorks is a cloud-based system aimed at forex and CFD traders alike, designed to optimize trading through a simple to use interface. Taking the human element out of the trading equation has a lot of benefits. First and foremost, it removes the “ego” blocks. There’s nothing personal about trading It enables a trader to implement enhanced technical analysis and gives room for further efficiency.
Automated systems like TradeWorks have an often overlooked parameter. Namely, Risk Management. We’ve all heard the term “live to fight another day.” Applied to the world of online trading that means don’t over-extend your trading. Nobody gets it right all the time, and if your risk management strategy isn’t sound, one bad trade might mean the end of your account.
Another key parameter of the TradeWorks system is time management and reaction-time. The forex market is a round-the-clock deal. The sheer volume of trading information can make it very difficult for traders to keep track of all the main trading events and news throughout the day. Using an automated system can possibly solve this problem. As long as the system is running, it can monitor the markets and execute your strategies quickly and efficiently. All you have to do, is to design and implement your own strategy through the software and set up your own opening and closing positions.
The TradeWorks software works by creating trading strategies based on a combination of technical indicators and market conditions for a particular asset along with user-defined options, such as trade size and enter and exit points. The system will then monitor the price movements and open (or close) positions if the market conditions match the options used when building the strategy.
Building a strategy in TradeWorks is a 4-step process:
Which technical indicators you will be using in your strategy
The signal rules define the direction opened trades will take (Long or Short)
Trade Timing Rules:
These define additional steps in the strategy that have to happen after the initial trigger before trades open. Using timing rules allows for complex algorithms to be developed with multiple criteria, as opposed to a single trigger.
Risk Management Rules
These rules define the risk profile of your trades such as Trade Size, Stop Losses and Take Profits.
Once you’re happy with your strategy, the next step is to run it through the TradeWorks back-testing module to gauge how it would have fared with historical data. This back-testing data allows for deep analysis of the strategy results and includes a wealth of information such as PnL (Profit And Loss), RoE (Return On Equity), Volatility and Win/Loss ratios.
TradeWorks connects directly to an MT4 account so as long as your broker supports the MetaTrader 4, then you’re good to go. Connect your TradeWorks and MT4 accounts, and your strategies will be live on your trading account.
While TradeWorks can be used to create, back-test and trade complex strategies, as with any trading activity, there is risk involved with using such trade automation software and losses may be incurred.
This article is for educational and informative purposes only and should not be considered as investment or trading advice.The Client acknowledges that the Company does not provide investment advice nor portfolio management services, therefore if the client chooses /install any third party or follows any instruction or indication from third party providers (such as trading signals, copy trading, strategies, Expert Advisors, algorithms, trailing stops etc.) the Company shall not be held responsible for any losses incurred or any malfunctions, delays, inaccuracies due to the above mentioned.