Strategic methods for automated trading in Forex

This study focuses on the negotiation in the financial markets, specifically in programming an algorithm to trade automatically (without human intervention) in the foreign exchange market (Forex). The platform used in this study was the Meta Trader (version 5), which allows for this kind of negotiation. The main objective was to conclude about the effectiveness of a newly developed strategy for automatic negotiation. The developed strategies must have the ability to identify situations with lucrative potential based on several types of trading strategies used around the world. Methods were created based on technical and fundamental analysis as well as correlations. Fundamental analysis, in particular, is a novelty in this type of algorithms since, most part of the times, it is hard to quantify the information necessary to make decisions based on this type of analysis. Moreover, some other functions were developed in order to optimize the overall performance of the implemented strategies.

I. Introduction

Nowadays, we live in the era of computers and information technologies, since people rely on them to perform tasks in a more reliable and faster way than it would be possible for a human being. In the last few years, financial market traders have been growing aware of the potential of these technologies to analyze and trade.