Benefits of Automated Trading Systems

Automated Trading SystemIt is reported that more than seventy percent of the

shares traded on the US stock exchanges come from

these automatic trading systems. Automated trading

system requires the use of software linked to a direct

access broker.

https://buysideglobal.com/pages/auto-traderhttps://buysideglobal.com/pages/auto-traderhttps://buysideglobal.com/pages/auto-trader

Here are some of the benefits of having the computers for trading:

#1 Helps in Minimizing Emotions

Automated trading system minimizes emotions in the process of trading so that traders can easily stick to the game plan. All the orders are automatically executed. So, once the rules for trade are set and have been met, they won’t be able to question it. Moreover, it helps those traders who are afraid to go ahead. Apart from this, it helps those traders who have tendency to overtrade including selling and buying at every identified opportunity.

https://buysideglobal.com/pages/auto-trader

#2 Backtesting

It is applied to determine the feasibility of the idea. All rules are required to be complete with no place for interpretation while designing automated trading system. You can’t afford to guess anything and need to know what to do exactly. Before risking their money in live trading, traders can check these precise rules and then test them on the data from the past. Besides, careful backtesting allows traders to expect the amount they can win or lose.

#3 Diversifying TradingSystem for automated trading allows the user to trade various strategies or multiple accounts at a time. It helps in spreading the risk over various instruments while creating a hedge against the losing ones. Besides, being automated it helps in execution in milliseconds. The computer scans for different trading opportunities across wide market range and monitor trades along with generating orders.

#4 Enhance Entry Speed for OrdersComputers immediately respond to the

changing conditions of market. So,

automated systems generate orders as early

as the trade norms are fulfilled. Getting few

seconds out or in of a trade earlier makes a

huge difference in the outcome of trade. The

moment you enter the position, all the orders

are generated automatically such as profit

targets. Besides, markets move at a quick

rate. So, it is discouraging to have a trade

get to below past a level-before stop-level or

profit target before the entry of orders.

However, this situation is avoided with

automated trading systems.

Automated trading is an

efficient and effective

method of trading having

many benefits over the

traditional methods.