Automated Trading Systems VS Manual Trading in Forex Exchange Market

Dissertation presented as the partial requirement for obtaining a Master's degree in Statistics and Information Management, specialization in Risk Analysis and ManagementIn the recent decades, automated trading has been widely used in Forex and Money Markets, as well as in financial markets. This auto trading provided substantial benefits to transaction efficiency. Many trading robots have been created to substitute humans, capable of simulating trading strategies and continuously making profits. Nevertheless, programs cannot reproduce all human behaviour and most robots are over-sensitive, therefore, it is difficult to have the same results as human traders. The study focuses on evaluating the trading machines sensitivity and effectiveness. The economic markets can benefit from the machine in several ways, through continuous operation, increasing diversification, short/term trading opportunities and by forecasting opportunities e. g. currency price changes. The further investigation indicates that the majority of forex trading robots are profitable, in fact, there is a great tendency for curve-fitting or data-mining. There are some impressive robots out there; of course, these systems maintain an advantage and successfully manage risk. The best ones are more about position sizing and cutting losses quickly and less about high win rates. The greater the sensitivity the greater the trading opportunities, but this decreases the performance. This research will contain interviews with experts that will validate the study