The wind of automated trading is blowing [Takashi Shikauchi]

Because I can’t improvise, I’ll stay patient for the long term

In FX, automated trading has been gaining momentum recently. I’m fairly positive about automated trading. After all, it does it automatically for you. There’s no easier scenario than this. Since I want to automate trading as much as possible, even when I trade manually, I use limit orders and stop orders, and I try to avoid pressing market orders as much as possible.

FX is merely a means to make profits, and it seems that you don’t feel any real meaning in directly manipulating the chart that’s moving in front of you.

However, if you compare trading to driving a car, many people still want to drive themselves. I understand that very well. But if that mindset leads to a prejudice against automated trading, that might be a little wasteful.

The content of automated trading is still human ideas

First of all, even with automated trading, the rules for buying and selling are created by human ingenuity. Of course, machines aren’t randomly buying and selling.

The logic of automated trading combines technical indicators such as moving averages and MACD with universal chart analysis theories like high and low prices to form a single method. The machine then repeats that method calmly. The human trader’s concepts form the foundation for both manual and automated trading.

Diligence that won’t tolerate being salted away is appealing

As a merit of automated trading, as the name suggests, it trades 24 hours a day, which is noted in every article. Even if you’re drinking, visiting home, or the period between when your computer breaks and the next one arrives at home, trading continues.

And what I like is that even during periods when losses pile up and trading becomes unpleasant, automated trading keeps running.

One of the most forbidden actions in FX is leaving losses unattended, “salted away.” But automated trading never reaches that state. No matter how disastrous the losses, it keeps trading steadily. The operation ends when the investor stops by their own will or when funds run out. Idle funds are not left behind.

A dull, stubborn type that can’t improvise in tasks

Automated trading leaves no room for discretionary judgment. This has both pros and cons.

Discretion can be based on fundamentals like “there’s a presidential election next week, so close positions,” or on rule-of-thumb experiences like “this scenario has lost before, so today I won’t enter.”

This so-called “improvisation” can either boost or reduce investment performance. A veteran trader’s discretionary judgment may lead to early exits in dangerous markets, while a less experienced trader’s discretionary judgment may miss chances to enter a big move; both pluses and minuses exist.

Automated trading lacks these elements, but as a result, I feel it takes longer to see results. It’s “a guy who can’t improvise,” so I’m not good at agile maneuvers. I have to wait patiently until a favorable pattern arrives.

Instead, when a favorable pattern appears, it works tirelessly, day and night. That clumsy but sincere trader—that’s my image of automated trading.

In particular, programs that ride the trend with small losses and big gains require you to stay with them until a clear trend emerges, or they’ll become mere stop-loss machines.

Note: This article has been updated and edited from the FX攻略.com Editorial Office’s newsletter for 富士山マガジンサービス readers.

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Takeshi Kunai—Musashi Katani (Musa Shi) Profile

CEO of TCL Co., Ltd. He has been on the editorial team since FX攻略.com was launched in 2008, involved in the operation of the magazine and the official site. In addition to interviewing and writing articles, he also operates FX daily as a trader. Favorite technical is Heikin-Ashi; favorite method is breakout.

Official site：TCL Co., Ltd.