The prospect of using automated trading software seems exciting, but what should you be looking for in the software, and what are its best traits? In this article, we discuss. Why use automated trading software?
Several people still use normal trading software today, but using automated trading software is the way forward. Have a think about the questions below:
Have you ever wanted to execute your strategy with more precision? And maybe wanted to break away from your current trading routine?
Maybe you have had experience in trading before. It can be stressful at times and sometimes it can be easy to let your emotions get ahead of you when making decisions.
What if I told you that this could be managed. It seems like a good solution, right?
It’s like if Terminator went right rather than destroy the human race. That’s automated trading software, to an extent.
It’s a more refined method of trading, by using predetermined settings that are monitored by you that are then applied to the trading market.
It’s one of the fastest ways of trading and has heaps of benefits. For one, it monitors the trading market 24/7, so you don’t have to.
What do you need to know?
It’s all about algorithms. It sounds like a complicated word, but it refers to a set of rules that are programmed by a computer.
When it comes to automated trading, you will be able to choose from pre-made algorithms or build your own.
Maybe, you’re in a mood to experiment with this idea. Then building your own could be a rewarding experience.
Whatever two options you choose, you need to consider the following 2 points:
- Identify the market you want to enter
- The plan of your strategy.
You want to enter a market that you have an interest for. Maybe, there are some markets that you either have experience with or some knowledge on.
Whatever the case, give this part a bit of thought. It will definitely do you good in both the short and long term.
The best part about automated trading is that in normal trading rituals, you have a plan but have second thoughts. You’re not quite sure and sometimes it doesn’t get executed all the way through.
If this sounds like you, then pay close attention to this part.
The majority of automated trading is done by a machine, but it still needs to be fed the right information from you.
This is where defining your strategy comes into play. When deciding on a strategy, have a think about:
- risks involved
- market trends
It might help to do a bit of contextual research on your chosen market when tailoring your plan.
Installing this kind of software is easy, but there are things you still need to know.
It will help if you decide whether or not you want to trade in forex. As some trading softwares allow this and some don’t.
Generally speaking keep a look out for the following:
- Meta 4
- Interactive brokers
These are all trading platforms that are commonly used. What is great is that some are good for beginners.