Hi everyone,
I thought to throw this topic up for discussion: What is the the most popular way to trade in Retail Forex?
Now what do I mean by this? First thing I want to limit this discussion to the retail Forex market as financial institutions have much greater technology budgets, various asset classes to run arbitrage algo's, Direct Market Access etc...
I will use myself as an example in my trading methodology. I am trading manually where I have a plethora of monitors that show me price action in the spot market as well as the future market. Based on several strategies I will position myself in the market for seconds up to months depending on whether I am scalping or in a carry trade. All of this is "manual" as I have found it to be the most profitable based on my skills as a trader. This gives me what we call "Alpha".
Now I know other traders are semi-automatic in the way they trade. What do I mean by this? Well they will still manually "pull the trigger" to initiated a trade as well as close it but will have an EA show them of the potential trade in the currencies that they are actively monitoring. This is interesting as they still have the "alpha" but will use an algo or AI to point out conditions that they have requested. This is very helpful so traders will spot more opportunities without burning out with monitor fatigue.
The third option that I see is having an EA totally trade for you via conditions that you specify. Now I have been looking at this for several years and I have yet to see an EA that is successful "long-term" without massive draw-downs in volatile trading conditions. Now in a institutional level I have seen very successful algo's that take advantage of arbitrage situations but that involved multiple asset classes and would not apply to retail forex at this time.
My thoughts based on my original question is I am starting to think the best way to trade is via a semi-automatic approach where an algo/AI alerts me to a potential trade but where I make the decision to actually pull the trigger...
Now don't get me wrong, I love to have an auto EA do me some trading but in the real world with limited access to technology and behind the curve in the execution process I really don't see how one can consistently make profit with a low draw-down in the trading account.