Preface

Forex trading has been popular for the last 20 years and its popularity is only growing. This market attracts new traders mostly because of huge potential profits and the ability to start with a relatively small amount of initial capital. However, at the same time, it is known to be one of the most dangerous markets, as according to the statistics of most regulators, more than 75% of forex traders completely lose their money.

This happens for a number of reasons. Some newcomers to forex tend to treat it the same as stock trading and try to invest in a market that doesn’t have an intrinsic upside potential. Others want to take advantage of high leverage, being inspired by multiple “get rich quick” books to hunt for legendary profits, incorrectly calculating their exposure, and then quickly losing their entire deposit.

But the main problems for all beginner forex traders are a lack of trading ideas and a lack of understanding of why the market may do this or that, when it may be reasonable to place a trade, when it may be problematic, and when to stay away from the market entirely to avoid almost inevitable losses.

Algorithmic trading can provide a solution to this problem because it’s based on rules that can be tested before any real money is put at stake. Beyond that, trading automation helps to mitigate operational risks and provides full control over execution, which is not achievable with manual order placement.

This book bridges the gap between the “easy forex” advertised by many retail brokers and the real forex market, with all its caveats and pitfalls, from the perspective of a professional algo trader. It guides the reader through all the necessary steps in developing automated trading strategies that have at least a chance of survival in this controversial market. It is not a collection of ready-made recipes for you to copy, paste, and run: the markets are constantly changing and you will have to adapt and re-adapt your strategies to them as they change.

The main goal of the book is to provide a clear understanding of what is possible, what is not, and what to realistically expect from algorithmic trading in forex. By the end of the book, you will have the essential knowledge of the forex market at the level of a professional desk trader. At the same time, you will have developed practical skills for implementing trading algorithms in Python. Although this book is only the first step for beginners into the world of forex trading, it can help you not only get started as a retail trader but also eventually find a job in this industry.