Algo Alchemist

Financial markets researcher who is exploring into unique perspectives and trading strategies.

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5 Reasons to Automate Your Trading

How would you like a trading assistant who never sleeps, never gets emotional, and sticks to your plan at all times? Sounds perfect right? This is exactly what API trading offers. Also referred to as algorithmic trading, automated trading is a form of trading that employs technology to trade under predefined conditions with little or no human input. 

Here are five reasons why automating your trading could be the best move for you yet!

Avoid Emotional Trading: Probably the biggest hurdle that most traders face is emotion. You risk cutting your losses too quickly because of fear or by remaining in a profitable trade due to greed. A trading bot eliminates this problem by ensuring that all trades that you create are respected regardless of price action.

Increases Trading Efficiency and Speed: Forex trading has always been associated with time, and time is money. In reality, automated systems can detect the change in the market and execute the trade in milliseconds, something that is impossible with human beings. After automating your trading, the need for slow manual trading is eliminated as you will be able to take market conditions optimally immediately.

Test Your Strategies Without Risk: One big advantage of API trading is the ability to backtest your strategies. You can examine whether the strategy performed effectively in the past, against the historical data. It's a practice that prepares you better for the actual trading than if you had no preparation at all. Whether you're using ActTrader or another platform, having the ability to test strategies beforehand can make all the difference in your success.

Reduce Errors: Mistakes can be part of the process of humans especially when markets are on the go. One wrong click or data either misread or read incorrectly leads to huge losses. Automated trading eliminates these mistakes as it is done strictly to the guidelines that you programmed.

Diversify Your Trading Easily: Automated trading allows one to implement a number of trading strategies on numerous markets at the same time. There is sufficient opportunity to enhance your trading by adding more instruments to trade which reduces the risk. Moreover, with API trading, you can handle several strategies management which is challenging if done manually

Conclusion: 

Automating your trading comes with many advantages, no time is wasted during trading, and efficiency is increased. It allows you to practice your methods, to save money, and to experiment with new ideas, all of which will help you in the end. 

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API Trading and Latency: The Speed Factor You Can’t Ignore

When an order is placed in API trading, the time between order placement and execution is referred to as latency. In forex and algorithmic trading, where prices can change in microseconds, latency can determine whether a trade is successful or not. Low latency practically guarantees that there will be minimal slippage (difference between expected and actual price).

Here’s why you can’t afford to ignore latency:

There always exists the possibility of worse prices due to small delays.

Your trade has a chance to slip without being executed on time.

Slow servers mean there are more chances to lose out than build up.

The lesser the lag, you make the orders, meaning the gaps you create between your orders and execution.

If your trades feel slow, here’s how to fix it:

Not all brokers can guarantee effective execution. This is why a search must be made for one that is optimized for API trading, like ActTrader-powered platforms.

Use a wired connection or a VPS for more stable performance.

Placing your servers close to major financial centers can cut down lag.

Limit API calls , too many requests slow things down. 

Some brokers let you connect directly to exchanges for faster order processing.

Final Remarks

For those involved in API trading, latency is not a mere detail. It greatly impacts your profit margins as well as your approach to trading as a whole. A quicker latency equals better execution of the trades.