Algorithm trading software is a type of software that can collect the data, monitors trend and react to the trading market very quickly. This helps you attain maximum profits out of it. It is very important that the time your algorithmic trading software takes to respond to the market should be very less.
Much of the growth in algorithmic trading in Forex markets over the past years has been due to algorithms automating certain processes and reducing the hours needed to conduct foreign exchange transactions. The efficiency created by automation leads to lower costs in carrying out these processes, such as the execution of trade orders.
Automating the trading process with an algorithm that trades based on predetermined criteria, such as executing orders over a specified period of time or at a specific price, is significantly more efficient than manual execution.
Following mentioned are the points to be considered while choosing the best from all the algorithmic forex trading platforms available:
- Backtesting – A backtest is a historical approach of an algorithmic trading strategy performance of the data in the past. Backtest results usually show the strategy’s performance in terms of profits and losses which help to calculate the strategy’s return on risk.
- Programming Languages – Choice of programming language is very important while deciding which platform to use for automating your trading strategy. Most commonly used programming languages used for algorithmic trading are C++, C#, Java, R, Python.
- Web-Based Platform – Some automated trading platforms also provide the web-based platform for online trading and backtesting which makes it easy and convenient to access your trading platform anywhere.
- Customer support – Before choosing the platform you should check the history of the program and about the history of issues in the past, resolve time of issue, etc.
If you are a beginner you can visit here to read this very helpful article which will inform you about all the basics of Forex algorithmic trading with concepts and examples.