What is a forex algorithmic trading strategy?

This forex algorithmic trading strategy entails the use of direct market access (DMA) to place trades. DMA means access to a sophisticated technology infrastructure which is often owned by sell-side firms. This infrastructure connects to multiple trading platforms and houses order books of financial market exchanges.

Why is forex algorithmic trading so flexible?

It is flexible because a wide range of strategies can be deployed through the algorithm. There are four basic types of strategies that underlie at least 12 forex algorithmic trading strategies. Strategies can be mixed and matched in any number of combinations, depending on the trader’s objective.

What is algorithmic trading?

An algorithm is essentially a set of specific rules designed to complete a defined task. In financial market trading, computers carry out user-defined algorithms characterized by a set of rules such as timing, price, or quantity that determine trades. There exist four basic types of algorithmic trading within financial markets: