Worried about following stock performance and thinking about buy/sell calls. Don’t fear automated trading systems is the best solution for all the worries. With the help of automated trading systems investors and traders can make precise traders, accurate entry and exit. For making accurate calls traders need to use stop loss, if Current Market Price CMP of stock triggers stop loss trade will be executed. Get a piece of code and place the trade. That’s it done and trade will be executed once that particular meet certain criteria. Automated trading is one of the beautiful tools for placing trades. There are pros and cons of automated trading system.
Automated trading system is a set of rules set by trader to execute particular trade. Here emotions won’t have effect on trades you make. Different trading platforms will have programming scripts that could be used as a automated trading system. Don’t have programming skills make sure you take someone helps and make use of this wonderful trading tool.
Pros and Cons of Automated Trading System
Emotion less Trades
Probably one of the biggest advantages of automated trading system. Traders need to place a trade and all the trades will be executed automatically. Set stop loss, target and place the order. No need to look at stocks all the time and order gets executed once stop loss or target is achieved. As traders are not keeping an eye on stock performance so emotions will take back seat.
Backtest your strategy
With automated trading system one can back test the trading strategy. It will help in identifying the effectiveness of the trading strategy. Make sure you specifications are precise that will help you make good and effective returns.
Consistency and discipline
With automated trading system one can achieve consistent and disciplined results. As they say trade the plan and plan the trade. With single trading plan one can’t achieve success all the time. As a trader you need to make efficient plans and strategies to achieve goals.
Cons of Automated Trading System
When there are advantages for any tool you will have disadvantages. Make sure you know what are the disadvantages that affect your trades.
Automated trading is a programming script that will execute your trades. There are certain chances that these trades won’t get executed due to machine failure. Don’t keep all the your hopes on automated trading. Remember automated trading is a learning curve.
As we discussed automated trading requires less concentration. Hang on a second computer failures is the only reason that makes you have a constant look on stock performance. So to avoid mechanical failure make sure you have backup for these crisis situations
The above are pros and cons of automated trading system. Many of use automated trading system for its advantages but don’t forget the cons that might affect your trades. Before deciding on trading strategies make sure you have learn the things and understand what is happening in stocks.