FIX API trading: what tools are required to trade with minimal risks
Category : Robots
For a successful trade, the trader has to face a thorny path of endless trials and errors. One type of analysis is replaced by another, trade strategies are replaced by the better systems, and so on. Over time, however, everyone who dealt with financial market trading has come to create more than just their own sponsorship strategy and methods of action in the marketplace, namely the automatic approach. It’s about trade robots and other supporting software for the fix api trading. This made easier to perform transactions and, of course, to increase the financial result. However, the market developed and with the development of information technology, the new tools were also developed to predict the future price movement.
That’s what we’re going to talk about today. I’m going to tell you the techniques and the tools that I use in my trading. We will consider useful software not only for automating trading, but also for improving financial performance of trade, namely, reducing risks.
So, to begin with, I consider that the FIX API trading implies high-frequency trade on the financial market, which is trading through a special protocol FIX. This protocol provides timely market information in the form of quotations. This protocol has been in use for more than twenty years and has replaced trading through a telephone on a computer.
Returning to the question at hand, there are many utilities and scripts in the marketplace that allow the monitoring process to be carried out. However, only monitoring. How correct are the scenarios for the trade terminal fix api MT4 that display the current state of the deposit. But it’s not a risk control, it’s just a display of them.
With this in mind, I recommend that you use tools that directly prevent you from doing a commercial operation based on specified parameters. This will allow you to preserve the resources from both psychological and market influences. This software will allow you to display the current result of the trade account and to restrict the trade basing on the conditions created.
What should be the conditions for correct risk control?
- Risk of transaction. Remember, you should trade considering risk and not risk trading. You need to know how much you can lose in a particular transaction and be prepared for it.
- Risk per day/week. Similar to the first parameter, you need to write a parameter for the allowable loss per week or day that will end the trade for a certain period of time.
- Diversification of financial instruments. For example, if you are selling a dollar at the same time in different currency pairs, the application should not allow the fourth operation also to be opened for sale (or any other quantity). If the forecast is incorrect, all the transactions will show a negative dynamic.
- Maximum number of consecutive losses. If you have received a few “stop losses” in a row, you should review your approach towards analysis and trade.
- Maximum seating percentage. If you’ve earned 10% at the beginning, and then the score is down to 5%, then you lost 5%. The 5% is a seating. I recommend limiting this indicator to preserve not only the capital but also already earned money in the marketplace.
The advantage of FIX API trading is that all the risk-control tools I’ve brought above can easily be written in the code and used in trade.
I use these these tools in my trading, and I recommend you to implement it. Remember that int he fis api forex marketplace the main goal is to save money, and only then earn more!