Can Artificial Intelligence help in Forex Trading?

An average Forex trader

You are watching the EUR/USD and watching the chart breaking through the resistance line . You notice significant buying interest. You get in, to ride the trend as you havebeen taught in your course you have paid a lof of money for. Or perhaps you have read it in a few books over the past many years.

As soon as to get in, the chart moves downwards. You are watching in disbelief as the price is getting closer to your stop loss . You are staying in, because you know, you have to stay disciplined . Only a few minutes later the price moves down and snaps your stop order . Not again ! Another 25 pips down the toilet .

Then

Soon after your stop/loss was hit , the price starts moving up again and within minutes it goes up 60 points. You were right all along.
It is frustrating isn’t it?

Well, it happened to me too, many times . Working with small time frames , 1, 2 or 5 minutes you tend to use small stop loss orders , such us 20 or 30 pips. The problem using such smallS/L orders that is that it often gets hit as the price moves in an erratic way .

Successful traders on the market often take a longer term approach and use 1 or 4 hour bars and aiming for larger pips per trade. The problem using longer bars , that it becomes boring over time .

What usually happens, that you want to trade when you are sitting on front of your PC . That is why most Forex traders frequently use the 1 or 2 minutes charts, so they can actively trade 4-5 or even 20-30 times during a trading session . Trading this way makes the broker rich, but not the trader .

But how do you trade using longer bars like 4H? The perfect trade often occur when you are asleep, at work or went out for shopping.

Well there is a solution:

Use EA for MetaTrader . It can automatically place trades for you while you are away from your computer.

I found most of the Expert Advisors to be just toys and really don’t make money on the long term because tha market is continously changing . You need to keep changing the parameters to learn the new market condition.

This is when Neural Networks can assist . Using AI in your forex Expert Advisor can assist in changing those parameters , because the AI engine can learn the new patterns in the market and can do it for you. One such system I worked with recently is forex-ai.

Steven Zed

I am a professional Forex trader since November 2007. I mostly trade the majors on a longer time frame. You can contact me on http://www.metavest.com

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