Automated trading, also known as algorithmic trading, is a fast growing segment of retail trading.
What is automated trading? Simply speaking, it is an algorithm or algorithms that execute trades, following predefined instructions to support the trader’s strategy
There are many reasons why you should turn to automate trading but here are five main ones:
- Avoid emotions
People have emotions and sometimes tend to act irrationally. Configuring algorithms when you have focus and perspective, and then allowing those algorithms to execute those decisions on your behalf is one way to minimise self-sabotage.
- Check yourself
There are multiple possible outcomes when you trade with robots across platforms. Traders can employ backtesting to test the efficacy and understand the trading system’s edge with data samples.
- Going Turbo
People are not machines, we cannot process multiple things simultaneously. Automated trading however can harness the processing power of specialised software, reacting to market changes in rapid succession and capitalising on the moment.
- More “me time”
If everything is automated, you will definitely have more free time. Once configured and optimised, it is mostly about periodically checking your positions and your account.
- The more you know
Technologies are developing extremely fast. Every day some new developments appear, so there is a high chance that in several years those that begin on the algorithmic journey could possibly stand a chance to capitalise on new developments.