Friday, April 8, 2016

6:04 PM

Forex Trading Platform

An automated trading system (ATS) is a computer program that creates orders and automatically submits them to a market center or exchange.

Automated trading systems are often used with electronic trading in automated market centers, including electronic communication networks, "dark pools", and automated exchanges.^[1] Automated trading systems and electronic trading platforms can execute repetitive tasks at speeds with orders of magnitude greater than any human equivalent. Traditional risk controls and safeguards that relied on human judgment and manual speeds that were appropriate to manual and/or floor-based trading environments, must now be automated to evaluate and control automated trading.

As of 2014, more than 75 percent of the stock shares traded on United States exchanges (including the New York Stock Exchange and NASDAQ) originate from automated trading system orders.^[3]^[4] ATSs can be designed to trade stocks, options, futures and foreign exchange products based on a predefined set of rules which determine when to enter an order, when to exit a position and how much money to invest in each trading product. Trading strategies differ; some are designed to pick market tops and bottoms, others to follow a trend, and others involve complex strategies including randomizing orders to make them less visible in the marketplace.

Backtesting of a trading system involves programmers running the program using historical market data in order to determine whether the underlying algorithm guiding the system may produce the expected results. Developers can create backtesting software to enable a trading system designer to develop and test their trading systems using historical market data to optimize the results obtained with the historical data. Although backtesting of automated trading systems cannot accurately determine future results, an automated trading system can be backtested using historical prices to see how the system theoretically would have performed if it had been active in a past market environment.^[5]^[6]

Forward testing of an algorithm can also be achieved using simulated trading with real-time market data to help confirm the effectiveness of the trading strategy in the current market and may be used to reveal issues inherent in the computer code.

With over $3 trillion^[1] in average daily turnover, the foreign exchange market (forex or FX for short) is five times the size of the U.S. futures market, making it the largest market in the world. Surprisingly, this market is unfamiliar terrain for most individual traders and investors until the popularization of Internet trading a few years ago. Forex was primarily the domain of large financial institutions, multinational corporations, and hedge funds. However, times have changed: the U.S. Dollar (USD) recently fell to record lows, and everyone, from car dealers to bartenders, is waking up to the impact of currencies.

Unlike the trading of stock, futures, or options, Forex trading does not take place on a centralized exchange, but instead through different forex brokers. At first glance, this ad hoc arrangement must seem bewildering to investors who are used to structured exchanges like the NYSE or CME. Forex Partners However, this arrangement works exceedingly well in practice: investors in forex must both compete and cooperate with each other, and self-regulation provides an effective amount of control over the market.

How to Find the Best Online Forex Trading Platforms

It's never been easier to profit from the foreign exchange (forex) markets. With trillions of dollars of currency traded on a daily basis you can now access forex trading online through dozens of UK brokers.

But how does online currency trading work? And what should you look for when you compare online forex trading accounts?

How do you trade forex online?

Online currency trading involves you using your internet based forex account to predict whether a value of a currency will strengthen or weaken in relation to another currency. If you predict correctly then you'll profit, get it wrong and you'll incur a loss.
When you trade forex online you effectively buy one currency and sell another so, when trading currency online UK traders have to select a 'currency pair'.
For example, you might buy the US dollar against the Japanese yen anticipating that the dollar will increase in value relative to the yen. If the dollar does rise relative to the yen during the period of your trade, you will make a profit. If it falls in value relative to the yen you'll incur a loss.
The most commonly traded currencies in the world are the euro (EUR), British pound (GBP), US dollar (USD) and Japanese yen (YEN).
One of the main advantages of online forex trading UK investors benefit from is that you can trade 'on margin'. This means that you can open a position far in excess of the capital in your forex account.
For example, if you wanted to trade £50,000 on the GBP/USD currency pair you would be required to have just £1,000 of capital at 2% margin.
However, if the forex market moved against you would need to have the full amount, plus any additional losses, available to settle your trade. This is why it's important you don't trade without having sufficient funds to leave you with the money to repay what you may owe.
More Info At : https://www.fxcm.com/platforms/