While I was working three summers as an intern at a hedge fund in the IT department, I learned a lot about forex trading. My primary job was to monitor the network and make sure all systems were running smooth. While I was not involved in any operations on the trading floor, I did learn plenty during breaks with colleagues. The hedge fund was using quantitative strategies, which means plenty of computers and trading algorithms in order to trade the fast moving forex market. This increased my interest, coming from an IT background as a computer engineer.
After my first two weeks I decided to learn about forex trading, not only for the lingo during the conversations to make sense to me but also because it sounded fascinating. You may have heard the phrase “Give a man a fish and you feed him for a day, teach a man to fish and you feed him for a lifetime.” I have the same approach to my life, I don’t want the fish as it makes me dependent and stops my progress. I want to learn to catch the fish and be in full control of my life. This is something I urge all readers to think about.
I ventured into my forex education and was blessed enough that colleagues at the hedge fund were kind enough to answer my questions. This helped shorten my learning curve drastically. For obvious reasons, they were unable to share their trading algorithms with me. They are proprietary and heavily guarded as they are what give them the edge over others. This had me thinking about how to create my own edge in the forex market. Doing what others do is not a strategy I would like to follow. Most end up with losses as ample research has identified.
Since the forex market moves very fast and reacts to developments instantly, I failed to see how I could create an edge as a part-time trader. I simply lacked the time to trade which meant that my success likelihood was severely reduced. There are plenty of trading signal providers which charge a fee for their services. My starting account balance was not high enough to justify such an expense, plus I still had to place the trades and manage them manually. It just didn’t feel right to head down this way.
Then there are PAMM accounts which meant I have to split my profits with the manager. While it makes sense to pay your manager for good performance, this was a bit too passive for my personality. I wanted to be more actively involved. I was looking for a combination of trading signals from a trusted source, but without my presence required in order to execute the trades. I did look into various copy-trade services which allow you to select your traders you with to follow and copy and the system will mirror their trades in your account.
I felt like I was on the right track. I did eventually hover into using expert advisors or EAs as they are known in forex circles. The good thing about the MT4 trading platform is that you can use EAs and develop them. The MQ4 language is well documented and any computer engineer can code their own EA. There are plenty of free ones available, but they generally don’t work well over time. I would not recommend that you waste your time with them. Then there are an abundance of paid ones on the market.
One needs to be careful as there are a great deal of scammers out there selling EAs which don’t work. There are also good ones, but they are often expensive. I tried hard to create a portfolio of five different EAs in order to diversify my forex trading approach. I started this year and opened my first trading account at PaxForex. My colleagues at the hedge fund told me that a reliable broker is as important as a reliable forex trading strategy. I listened to their advice and continue to learn a lot. I am very happy that my three summer internship created lasting friendships.
The performance of my 5-EA forex portfolio is good, not great yet but good. I have only operated it for five months with $5,000 in my account. I am tweaking the settings as I get more data while I am in the process of creating my own EA. PaxForex offers daily trading recommendations and I want to trade them in my account as well. My plan is to create an EA which reads the trades after they are posted, then places them into my account with the parameters as outlined by their expert analysts. That’s my current project and I am excited to finish it and deploy it. I want to eventually operate 5-7 different trading accounts at PaxForex, each with its own EA running the show!