Published: March 11, 2019 6:30 PM EST
by Richard Cason, Editor NewmovesMarketsForex
News Moves Markets Forex launches Forex ‘Fireside Chats with FX Experts’.
Tom Kadala, FOREX Algorithm Engineer Founder of RagingFX®
Last weekend I sat down and had an exclusive interview with Harvard Business School Graduate, Tom Kadala.
Mr Kadala is an internationally recognized writer, speaker, and facilitator on topics related to FOREX trading. Mr. Kadala is also Founder of RagingFX®, an FX signal provider based out of New York City that not only delivers timely signals but also operates 100% autonomously. More on that later…
Is Algorithmic Trading Right for You? Find out what a Forex expert from Harvard Business School recommends.
NEWSMOVESMARKETSFOREX:
Tom, the term ‘Algorithmic Trading’ is getting a lot of attention these days, while also creating a lot of confusion. Can you explain in simple English what exactly is an Algorithm and what does it mean to do Algorithmic Trading’?
TK;
Sure. Thanks for having me. Algorithms or Algos in FX are computer programs that are designed to look for specific situations or match chart patterns of any number of currency pairs. These programs are popular among traders who spend a good portion of their day drawing up numerous chart levels like Fibonacci and watching for specific buy/sell opportunities based on a combination of aligned indicators like moving averages, stochastics, ATR’s, ADX, CCI, RSI, and so much more.
For anyone getting started with FX trading or trading in general, the list of indicators can be daunting. There are hundreds and many come with funny names or names you can’t pronounce easily, such as, Ichimoku. …popular in Japan. For those that make it through the maze of indicators, they are forced to narrow their choices down to a handful of favorites. It only makes sense because you can only monitor a few indicators at a time before losing your edge. Adding an algorithm to do all these mundane tasks can only become a game changer.
Algos can automatically canvas multiple indicators without losing a beat. When a potential trade setup approaches, the algo will let you know. It could be a flashing alert on your screen, an email, a notification, a text… It depends upon the person who designed the algo. What matters is that the algo can do all the heavy lifting analysis required across multiple pairs, non-stop, while you can be busy doing something else. It’s the ultimate assistant, really!
After experiencing trading FX with a good algo, you start to wonder how you ever traded without one. It just makes a lot of sense.
NEWSMOVESMARKETSFOREX:
If I’m new to trading Forex, should I even be looking at Algorithmic Trading? It almost sounds too complicated for a beginner. What are your thoughts?
TK:
I agree that the terms AI, Artificial Intelligence, and Algorithmic Trading can seem too sophisticated for a beginner. Most who are just getting started might feel more comfortable in a traditional classroom setup. Ironically, however, that notion could not be further from the truth. Algorithmic Trading is meant for beginners. In fact, the entire premise of AI is to not just to assist a trader with mundane tasks but more important to help any trader of any level to trade with the consistency and competence of a professional. That’s exciting!
NEWSMOVESMARKETSFOREX:
Definitely! Are you telling me that if a newbie to FX starts off using an algorithm, they could match the performance of a pro trader?
Using AI and ML to trade FX is the next trend to watch after HFT. Welcome to the future of trading.
TK:
Absolutely! …and I’m not saying that lightly either. Take for example Google. Google is a form of a search algorithm. You ask it a question and it deciphers your misspellings and in milliseconds lists links to the most likely answers to your inquiry. In some cases, it even offers the answer without having to click on a link.
Having access to Google has made every one of us that much more competent on a million different issues. Because you have Google, you can research just about any topic of interest and develop a comprehensive report that could match that of an expert in the field.
The question you should really be asking is how could I ever get along without Google? The same emotion you feel for Google is true with algorithms for trading FX. FX algos can empower anyone to trade like a pro and soon than later you’ll be wondering how you traded without one.
NEWSMOVESMARKETSFOREX:
Ok. I get it. So, how does a beginner get started with an FX algo? 
TK:
I’m glad you asked. Like anything in life, algorithmic trading requires some basic understanding of the markets and a little practice entering trades, while on-the-go. Traders new to FX tend to have the hardest time breaking away from their old trading practices. Surprisingly, my best students are those who have never traded before. They don’t have any bad habits and assimilate the new methodologies as dogma right from the start.
Getting started will depend on the algo you choose. I can speak for what we do and would urge anyone looking to get into FX for the first time to do a little homework. If you’ve never considered algorithmic trading, maybe it’s worth trying it out before shelling out $2,000-$5,000 to attend a traditional classroom setup. Algorithmic trading courses can run you a lot less. In fact, we offer it for free with a three-month subscription to our daily signals.
Our self-guided, online course is super-efficient because it is integrated with our algorithm. It teaches exactly what you need to know to trade our signals. Let’s face it, if you’re looking to trade FX to make a quick buck, this course is not for you. If on the other hand, you’re looking to make a steady income trading FX, then, yes, our course is for you.
When you purchase a subscription with us, we give you two options. If you’ve traded FX before, we can send you all 12 modules in one email. If you’re new to FX trading or even trading in general, we will convert our lessons into a 12-week course and assign you a mentor who can answer all of your questions.
For 12 weeks, we deliver one module per week. During that period, we focus on breaking old habits, while developing new ones. We take a step-by-step systematic approach to trading. We practice receiving an alert, reading the signal’s key codes, choosing the appropriate trading strategy, and finally, entering the trading from a smartphone. We also create a demo account, so students can focus on the weekly lessons.
After practicing with nearly 200+ signals over the course of 12-weeks, our students know exactly what to do when a signal alert email arrives. …and when they decide to open a live account and trade real money, the key skillsets they developed kick in instinctively. They can hardly tell the difference between trading a demo or live account
Using AI and ML to trade FX is the next trend to watch after Flash Boys.
NEWSMOVESMARKETSFOREX:
I get it! You mentioned trading off a smartphone. How does that work?
TK:
Using a smartphone to trade FX is not just for convenience but it’s also to stop one from becoming obsessed with a trade. We use a free App called MT4 that works with every FX broker. The same account on your desktop can be found on your phone. The advantage, of course, is that you can be anywhere, doing whatever, and still trading FX. Since our signals are designed with a shelf life of at least 10 minutes to a few hours, you can easily pull away from a meeting, for example, check the signal, follow our check list of instructions and enter a trade, …all in less than 30 to 60 seconds. FX trading becomes a tiny part of your day rather than the entire day.
NEWSMOVESMARKETSFOREX:
Do I enter my own trade?
TK:
Yes. You do enter your own trades. The MT4 App makes it easy by pre-entering most of the numbers for you. You can fill in the rest by reading off the last few digits for each level our email. Our signals include all the information needed to complete the trade. These include the Entry level, the Stop Loss, and the Take Profit. Mastering this part of the process takes a little getting used to and that is why we have our students practice over a 12-week period.
Once the trade is placed, you can follow it from the same app. …but over time, the temptation wanes quickly, since it’s on a small screen. We deliberately encourage our subscribers to trade with their phone, so they are forced to forget the trade and go about their business. We refer to it as ‘trade and forget’.
NEWSMOVESMARKETSFOREX:
Why is ‘trade and forget’ so important to you?
Most traders lose money because they follow their trades too closely. They either stay in the trade too long or exit early. By letting the algo’s probabilistic calculations act as a reliable guide, the odds of making a decent profit increase significantly with each trade. Add the built in daily risk management calculations and as long as the algo’s win/loss ratio is above 50%, making money is almost an afterthought. Our win/loss ratio, by the way, has been consistently around 70% for the past two years.
There’s more… By trading from an iPhone, for example, you are no longer tied to your desk. You can hold another job, attend your kids ball games, or simply have a life away from a computer screen.
Wherever you go, our alerts will follow you. Once more, if you miss a signal because you were too busy or in a meeting. There’s no need to panic. The algo never stops working and will send the next signal just as soon as it’s ready.
This information was fantastic. Thank you so much for taking the time to chat with us. Unfortunately, we’ve run out of time. We will definitely invite you back again.
