In addition, I've had some comments from people suggesting that they'd like to see more varied order types than the simple Market Order. For carrying out proper HFT strategies against OANDA we are going to need to use Limit Orders. This will probably require a reworking of how the system currently executes trades, but it will allow a much bigger universe of trading strategies to be carried out.
Equity – Your equity is simply the total amount of funds you have in your trading account. Your equity will change and float each time you open a new trading position, in such a way that all your unrealised profits and losses will be added to or deducted from your total equity. For example, if your trading account size is $1,000 and your open positions are $50 in profit, your equity will amount to $1,050.
The market then wants to trigger one of your pending orders but you may not have enough Forex free margin in your account. That pending order will either not be triggered or will be cancelled automatically. This can cause some traders to think that their broker failed to carry out their orders. Of course in this instance, this just isn't true. It's simply because the trader didn't have enough free margin in their trading account.
Now that we have discussed the longer term plan I want to present some of the changes I have made to the code since diary entry #2. In particular, I want to describe how I modified the code to handle the Decimal data-type instead of using floating point storage. This is an extremely important change as floating point representations are a substantial source of long-term error in portfolio and order management systems.
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The script is currently hardcoded to generate forex data for the entire month of January 2014. It uses the Python calendar library in order to ascertain business days (although I haven't excluded holidays yet) and then generates a set of files of the form BBBQQQ_YYYYMMDD.csv, where BBBQQQ will be the specified currency pair (e.g. GBPUSD) and YYYYMMDD is the specified date (e.g. 20140112).
The Forex market is one of a number of financial markets that offer trading on margin through a Forex margin account. Many traders are attracted to the Forex market because of the relatively high leverage that Forex brokers offer to new traders. But, what are leverage and margin, how are they related, and what do you need to know when trading on margin? This and more will be covered in the following lines.
Trading foreign exchange on margin carries a high level of risk, and may not be suitable for everyone. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. Remember, you could sustain a loss of some or all of your initial investment, which means that you should not invest money that you cannot afford to lose. If you have any doubts, it is advisable to seek advice from an independent financial advisor.