Automated Trading System
Market behavior is quite dynamic. Predicting where and when to trade for the highest profits can be challenging. An expert advisor, or trading robot, is a computer-based automated trading software that trades for you in your account. Automated trading can make thousands of trades per second. If an algorithm is set up correctly, it can be a very powerful tool. According to a 2019 study, trading algorithms outperformed humans in approximately 92 percent of forex trading. More and more traders are using automated trading, which can do many things that manual trading can’t.
What Is Automated Trading?
Automated trading simplifies and streamlines complex trades while lowering the costs associated with human traders. A computer program that follows a set of instructions is used by an automated trading system to make a trade. When the initial conditions are met, the computer program will monitor the asset’s price and automatically place buy and sell orders. The trader no longer has to type in orders by hand or look at current prices and graphs. This is done automatically by the automated trading system, which recognizes the trade opportunity accurately. This is why it can be very beneficial for manual traders.
What Are The Main Benefits?
One of the key reasons for automated trading‘s popularity is the advantages it has over manual trading. The advantages are:
- Speed: A robot trading order can be processed in 10 milliseconds or less. It allows traders to execute thousands of trades per second.
- Accuracy: Computers are faster and more accurate compared to humans. When a robot trader performs a trade instead of a human, the probability of a mistake is reduced. The human factor frequently has an impact on accuracy levels. As a result, when a computer algorithm is used, accuracy improves.
- Cost-saving: Algorithms are used to divide big orders into smaller ones, which are subsequently traded in the market over time to obtain the best available price.
- Emotions: Automatic trading eliminates emotions throughout the trading process and hence plays a significant role in your success, particularly in the case of day trading. Emotional factors frequently result in the loss of discipline. Traders often easily stick to their strategy when they keep their emotions in check.
- Backtesting: Manual backtesting can be hard. This is not a problem for automated systems. There are even systems, such as MetaTrader 4 (MT4) and MetaTrader 5 (MT5), that allow users to backtest strategies for free.
Considerations Before Using An Automated Trading System
Using an automated trading system looks fairly practical and may help all traders make money without spending all day sitting at a computer.
- Ensure it has good trading patterns, such as stop loss, take profit, and trailing. Also, make sure the machine can effectively manage money.
- Keep track of how many lots are opened with each trade and the total at risk in the event of a loss.
- Understand your equipment and how usage affects performance. Because each trading system has its own features, such as the effect of timezone, minimum funds, selected timeframe, percentage of funds, and other criteria.
- It is essential that the automated system has been both backtested and forward-tested. We recommend that you look for one that has been forward-tested for at least a year. Because the forward test produces more trustworthy findings than the backtest.
Which Automated Trading System Is The Best?
If you have a trading strategy and want to get it automated, we recommend YourRoboTrader. With years of experience in the financial sector, it is one of the leading service providers of programming automated trading systems made in Germany. In the last seven years, they have helped investors worldwide speed up and make more money with automated trading. Their specialists will program your trading strategy and automate it for you. Then, the trading bot will help you by automatically trading based on your strategy. If you lack the programming expertise, this is the most straightforward approach to begin automated trading.
Whether you are a forex trader or a day trader, you can be more efficient using automated trading, and can be fully or semi-automated. They take the emotion out of trading. They are most suitable for short-term traders and can execute trades more quickly. In addition, you can use them 24 hours a day, seven days a week.