Reasons Why Your Business Needs To Use An Automated Trading System

The best automated trading software can enable investors and traders to turn precise entry, money management and exit rules into the automated trading system. The systems make it possible for computers to monitor and execute trades. One of the major attractions of automation is that it removes emotions out of trading because the trades are placed automatically once a certain criterion has been met. In this article, we will explain some advantages of using automated trading systems.

 

Minimizes emotion

The systems minimize emotion in the trading process. It keeps emotion in check and this makes it easier for the traders to stick to the plans. The trade orders are executed automatically as long as the trade rules have been met. Traders cannot question the trade or hesitate. The automated systems can also control the traders who are likely to overtrade because some traders sell and buy at every opportunity they get.

 

Back-testing ability

This is where the trading rules are applied to the historical market data in order to determine if an idea is viable. All rules should be absolute when designing systems for automated trading. There should be no room for interpretation because computers have to be told what to do and not to make guesses. Traders can, therefore, take the rules and test them before risking their money on live trading. Traders can also fine-tune and evaluate a trading idea in order to determine the expectancy of the system. The trader needs to evaluate the automatic trading software to know the average amount he can expect to lose or win.

 

Discipline preservation

Because the trade execution is automated and the rules are established, there is enough discipline maintained in the volatile markets. Sometimes people lack discipline because of emotional factors such as the desire to eke out more profit from the trade or fear of taking a loss. Trading automatically helps traders to maintain discipline because the automated system helps them to follow the trading plan.

 

Consistency is achieved

Planning the trade and trading the plan is one of the biggest challenges in trading. Sometimes a trading plan can have the potential of being profitable but if the traders ignore rules, they alter the expectancy that the system would have had. There is no trading plan that wins always. You must be ready to get losses because they are part of the game. Sometimes losses can be traumatizing so the trader might decide to skip the next trade if he experiences losses three times in a row. The trader then destroys the expectancy the system was having if the next trade could have been a win. Traders using the automated systems are more consistent by the plan and they can avoid trading disasters.

 

Diversity

The best automated trading software permits the user to trade various strategies and multiple accounts at a time. This creates the potential of spreading risk over different instruments and creating a hedge against losing. This can be very challenging to a human to be as efficient as a computer because computers can scan for opportunities across a wide range of markets and generate orders. It can also monitor trades. Read more: iflipinvest.com

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