Automated Foreign Exchange Hedging System with Threshold-Based Trading
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Solution Overview
Problem
Amateurs face significant challenges in profiting from foreign exchange transactions due to the complexity and risk involved, often resulting in substantial losses.
Innovation Solution
A foreign exchange hedging system that automatically buys and sells assets based on real-time charts, using a buying processor, selling processor, and profit locking-in processor to set and execute trades based on predefined thresholds, thereby minimizing user intervention and risk.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Productivity
If amateurs manually conduct foreign exchange transactions, then they can potentially profit from market movements, but they face high complexity and risk resulting in substantial losses
Solution Approach 1:
The system enables self-service automated trading where the computer automatically monitors exchange rates, compares them against predefined thresholds, and executes buy/sell orders without human intervention. The buying processor and selling processor continuously monitor the real-time chart and automatically place orders when thresholds are exceeded, allowing amateurs to benefit from automated decision-making while eliminating manual trading complexity
Solution Approach 2:
The system changes the operational parameters from manual judgment to automated threshold-based decision-making. By converting subjective trading decisions into objective parameter comparisons (exchange rate vs. buying/selling thresholds), the system simplifies the trading process while improving consistency and reducing emotional decision-making errors that lead to losses
2Speed
If amateurs manually monitor real-time charts and make trading decisions, then they can respond to market changes, but the time consumption and complexity result in losses
Solution Approach 1:
The system implements continuous monitoring of exchange rates through the buying processor and selling processor, which constantly compare real-time market data against predefined thresholds. This continuous automated action ensures no market movements are missed while eliminating the need for amateurs to spend time manually watching charts, thereby maintaining high response speed without time consumption
Solution Approach 2:
The system replaces the mechanical process of manual chart monitoring and decision-making with an automated computational system. The computer processes exchange rate data, compares it against thresholds, and executes trades automatically, substituting human time and effort with machine processing speed and eliminating the time loss associated with manual trading activities
3Ease of operation
If amateurs take the easy way out in foreign exchange transactions, then they simplify the process, but they suffer enormous losses due to lack of expertise
Solution Approach 1:
The system introduces an intermediary automated trading system that mediates between the amateur trader and the complex foreign exchange market. The buying processor and selling processor act as intermediaries that implement disciplined threshold-based strategies, removing the need for amateurs to develop expertise while maintaining reliable, consistent trading behavior through predefined rules rather than emotional or impulsive decisions
Solution Approach 2:
The system performs preliminary action by pre-defining buying and selling thresholds before market movements occur. The profit locking-in processor sets predetermined profit targets and stop-loss levels in advance, allowing the system to automatically execute reliable trading decisions based on pre-planned strategies rather than reactive amateur judgment, thereby combining ease of operation with trading reliability
Data Source
AI summary
A foreign exchange hedging system for using a predetermined asset to automatically buy and sell another asset based on a real-time chart that displays in real time a change in a rate for exchanging the predetermined asset for the other asset, the foreign exchange hedging system comprising: a buying processor that carries out a transaction to buy a predetermined number of other assets based on a buying threshold for buying the other asset on the real-time chart; a selling processor that carries out a transaction to sell a predetermined number of the other assets based on a selling threshold for selling the other asset on the real-time chart; and a profit locking-in processor that locks in a profit by selling all of the other asset owned, on the basis of a profit lock-in threshold for a transaction on the real-time chart to obtain a predetermined asset.