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Automated Forex Trading, By You

Automated Forex Trading, By You

Over the past ten years, the world has seen the advent of--and momentary demise--many "black box" financial investment models. But not until very recently have forex traders had the ability to make their own black boxes. Now, you do have that power.

Or, for those of us who are not computer programmers, it is possible to hire someone else to make a black box for you. Once created, your black box can do your trading for you. Automated forex trading systems through the creation of a unique API (Application Programming Interface) is something that most currency traders could not even begin to do.

But for those that can create a helpful black box, the rewards may be tremendous.

The Best Black Boxes Are Predictive

The best black box investment models are highly predictive. They take action. Modeling algorithms employed by, for example, the proprietary desk traders at a money center bank generate actual buy and sell forex signals that happen without any input from human traders.

Forex proponents point out that the human element is not absent from this equation, because a human being wrote the algorithm(s) that generate the forex buy and sell signals. This is true, but may not be true for much longer--collective intelligence grows stronger every day.

You would be hard-pressed to come up with a faster-growing, more lucrative field for computer programmers than what is occurring right now in forex news in regards to automated forex trading.

The Best Black Boxes Rely on Assumptions

When we state that the best automated forex trading systems are predictive, we don't mean that they know the future. What we do mean is that these automated trading systems assert the future, aggressively, by implementing buy and sell signals with a total lack of fear.

If you look at what happened to Lehman Brothers, in 2008, you can see the danger inherent in black box trading systems: when a fundamental assumption proves false, the whole crazy machine can just plain crap out.

Assumptions can taketh away, but mostly, if they're good assumptions, they giveth. The assumption that housing prices would continue to appreciate provided a profitable paradigm for no less than seven years--bankers and related finance types got rich by the millions.

That is why the first and most important thing to do, if you're attempting to build out your own version of a black box automated currency trading system, is to identify and cling with all your might to a good assumption or two.

For example, you may believe that in the event of a major global crisis, the U.S. dollar will be a "safe haven" for worried investors. Operating under that assumption, you (or your hired hand) could program a forex autotrading system that sent you forex buy and sell signals according to some calculation of how many news stories about global unrest arise in any given day.

No, your assumption may not last forever, but what does?

You Want One, Make One: It's Not That Hard

Now, you can have your own black box. Seriously.

Forex software companies are, with increasing regularity, opening up their source code so that you can mess with it, changing and adding forex buy and sell signals that you believe in, that match your assumptions. If you're technically-inclined, this is great news.
Your first black box doesn't have to be, and shouldn't be, complex. But it must be automated, and it must be predictive, and it must rely on a good assumption about the future.

Also, if your black box ends up being valid, you may want to get other people to pay you to use your signals. There are few assets more valuable, right now, than an automated forex trading system that actually works.

Important Forex Information

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