What to do…

Introduction

So you are interested in trading the currency market. Good choice. Here is the setup of how I am trading using automated programs, or robots. My goal is a steady growth of my accounts, without having to lose sleep over the risks.

The Platform I use is the MetaTrader 4 client. It is available from numerous (hundreds) of brokers for free and all of them also make available demo servers for fictional, or educational, trading. MetaTrader 4 includes the possibility to automate trading using so called Expert Advisers (EA) written in a C-like language called MQL4.  Luckily, for most people, there are a number of commercially available ones so you don’t have to write your own EA to get started in automated trading.

There is a lot of matters to consider when trading automatically, so be warned, it is not a holy grail. You will lose money sometimes. With the wrong EA in the wrong market you will lose all your money. Below is a step by step guide to get started.

Understanding the market

I can almost guarantee you that you won’t be successful in the Forex market without some basic knowledge. Even if you have been trading equities like stocks before, you have a lot of learning in front of you. The positive is that it is real fun! If you, like me before,  isn’t to familiar with Technical Analysis (TA) you’ll have a threshold in front of you to get over.

So, in order to get started with learning all about the biggest marketplace in the world (actually it isn’t one market, but okay, it’s a dramatic statement at least…) head over to The School of Pipsology. Of course there are thousands of books and even more websites covering trading currencies, but I like the setup over at babypips.com and it is free. After going through the School you will understand what else to read about, especially if you have developed apatite for trading your own system.

Demo trading

This is imperative! If you put a EA straight into a live account you are taking a huge risk. Sure, if you’ve read good reviews of it online this might seem safe. But remember, there are often many settings that you could have set the wrong way. Also the EA might now work perfect with you current broker. If you run the EA in a demo account you will find these problems and will solve them before going live with real money. Promise me to run all EAs for at least two weeks in demo before going live, preferably four weeks. Also, it is always a good idea to test out new settings in demo before changing them live, even after you have been trading live for awhile.

Expert Advisors

As it is quite easy to write EAs there are  quite a lot of them online, both free and paid for. I have yet to find a free one that I can trust, but on the other hand I have found a few that I trust enough to trade live (with real money) that cost some ($100-150). Out of these I, at the moment, recommend you to start with just one. The reasons are multiple, but the most important when you are starting out is stability.

Out of the EAs I have traded (both live and in demo) Forex MegaDroid really stands out. It is very accurate, but is often critiqued for not making many trades. i think this is a trade off a beginner should be willing to take.  It is a scalper that only trades EURUSD and only for two hours every night, during the Asian session (learn about sessions in the School above). It currently costs $97 + VAT and it comes with a 60 day refund period. The payment is processed by ClickBank and they are the ones handling an eventual refund, not the developers themself (this is why you can trust it).

Read more about setting up MegaDroid (coming soon)

Of course there are other EAs. The other two I trade live is FAP Turbo and RoboMiner. I suggest you buy them in that order after running MegaDroid live for a few weeks, earning you money to buy the other EAs

Read more about setting up FAP Turbo (coming soon)

Read more about setting up RoboMiner (coming soon)

Choosing your broker

There are a great number of brokers available. I personally have live accounts with three and run demo accounts with those three and a few others. In total I sometime have up to 9 MetaTrader 4 clients running. It is important to understand that brokers come in a few different setups. These differences impact what kind of spreads they are offering to you and how smooth their order execution is. Some EAs are very broker sensitive. It is a jungle and there really are some scammers out there, so be careful. Try to read up on the broker online, at a forum you trust (I hang out regularly at donnaforex.com) or at a review site like forexpeacearmy.com (though there seems to be a over-representation of negative remarks on basically all brokers there, so read it with this in mind).

Another matter that is very important is to sign via an Introductory Broker (IB) that offers you some of the commission/spreads back. I personally have signed via cashbackforex.com for my Alpari UK and FXCM UK accounts, and with the Aslan Group for my Forex.com/UK account. This way I get back 0.42-0.6 pips for every standard lot traded. If you don’t know what that mean right now, just understand that is will accumulate to good money over the months your bots are making trades.

To open accounts, with cashback, follow this link and choose the broker of your liking. I personally run accounts with Alpari UK, FXCM UK and Forex.com/UK.

Virtual Private Server (VPS)

So you have decided to open an account with a broker and fund it with real money, you have also paid for a EA to do the trading for you. You figure you are set. Wrong. Well, you could do it this way, but I wouldn’t recommend it. You are taking a risk running the platform from your own home. What if there’s a power outage when you are in the market? Do you have a UPS? What if your ISP goes down for a few hours? Where do that leave you? Do you have a backup line that your traffic automatically  is switched over to? How about frequent backups of your hard drive? Are you really worrying about that on a daily basis? Well, I’m not (I run it weekly).

Have I got your attention? Good, this is important. There is a solution to all of the problems above. It is called a Virtual Private Server (VPS). For a monthly fee there are corporations that can give you access to a virtual session in one of their Windows servers, allowing you to log in and set up MT4 . The servers are hosted in a data center with all the bells and whistles needed to ensure the running of you trading platform. This way you save money on electrical since you don’t have to leave your computer on 24/5.

Check out www.swtech.ie for a UK based VPS. They have a solid reputation and I run all my MT4 sessions against Alpari UK from there.

If your brokers’ servers are in the US check out SWVPS.com. They have a nice affordable service.

Be sure to run your demo accounts in the VPS also, small differences in network connection can give different results in your trading than if you ran the demo accounts at home and your live ones at a VPS.  So do the tests on the same platform as you trade live.

Publishing statistics

Well, this is really not important, but it can be useful. There are services, for free, online that enable you to upload a log of all your trades to a website which simply publishes them in a easy to read format. You can use it primarily your self to check in on your accounts from any web browser, or you can publish them in you blog and/or in forums.

Check out www.MT4Stats.com. They have very nifty (recently added) analysis tools.

Summary

So that is the basics. Start out slow with one account and one EA, and expand from there. Don’t get in over your head and risk money you can’t loose.