Choosing Forex Dealer

When we decide to start automated trading, there are a few thing that we should understand will affect to the process. Most of Robots and Manual Trading System (both commercial or free) use value from certain indicator/s that will influence the process of trading function. The value itself is calculated from price in certain time. Different price will give different value of indicators so at the end will effect the result of a trading position.

The truth of forex dealers is hard to say but as many traders know that some of retail dealers are “market maker”. It means they handle orders from traders by themselves and make profit from trader’s losses. The dealers use many ways to cheat traders in order to make traders suffer losses. These actions will effect the result of a robot, too.

The point from explanations above is different dealer / brokerage will give different result from robots / manual trading system. Beside brokerage factor, some other things will affect the result, too. They can be human factor (greed, fear, etc), internet connection, and other things that can be interfere trading process. But at this article, we will discuss the broker factor only.

Selecting a good broker / dealer is not easy because limited information that we can get from the broker itself. Mostly, they give to the client are imbalance informations. They only say the good side but not the bad ones. So, it is our task to find the rest. From many forums, we know how people’s opinion about a broker. Some of them are valuable information that only can get by experience.

In technical opinion, good broker for automated trading suppose to provide these factors :

• Less requotes
• No or less spikes
• No freeze

In order to fullfil the requirements above, good brokers must provide Non Dealing Desk (NDD) feature. Unfortunately, mostly all retail brokers not support this. Even not many brokers support NDD, we still can classified good brokers from their status. It is a wise decesion to choose a registered broker which means there is still a supervision from reputable authority for brokerage services. With selecting a reputable brokerage, we reduce risk of cheating actions.

So, after choosing a reputable brokerage there are a few thing to do to begin automated trading. Mostly robots are programmed to run in certain trading platform. One which is very popular among forex trader is MetaTrader Platform. This software is developed by Metaquotes Co. and used by almost all retail forex brokerage. Robots that are running under MetaTrader platform is called Expert Advisor. This robot is written in MQL computer language which is similar to C++. Our broker must provide MetaTrader Platform if we want to use Expert Advisor to start automated trading.

A few things that must be considered in broker that support MetaTrader Platform are :

• Broker must activate Automated Trading in their service. Not all brokers provide MetaTrader Platform allow their clients to use robots for automated trading. We must confirm this before selecting a broker.
• Good broker must support Fast Execution. Delay for opening a position means losing a good momentum to start a position. Sometimes this can be broker the trading system that is used by the robots.
• Broker supposes to use Filtering Price. This means tick price data that is sent to client computer is being filtered. Data is smooth enough so this will give a better result for robots to calculated the value of indicators.
• Broker provides micro account. Not all traders are coming with huge capital to start automated trading and even they are, it is wise to start automated trading with a relative small capital to reduce the risk. Until we are sure about the performance of a robot, it is better to test its performance first. Some traders are using demo account to make test but I think the best result is coming from the real account.
• Broker provides High Leverage. It means we can start trading by deposit a small capital. But high leverage can hurt us, too. So, please consult this feature with your money manager before select high leverage for your account.

These requirements may be not the best but it still can help us to reduce the risk of selecting broker for automated trading. Just remember, selecting a good dealer means safer for your investment. This information must be considered again based at experience and market situation.