Advantages Of AutomatingThe 5 Advantages Of Working With Automated Trading Strategies
Automated trading systems are revolutionizing the industry: not only for the good results achieved, but mostly for the benefits they can provide the traderthrough simplification andimproving operational quality of trades.
Here are the 5 main benefits for those who are usingautotrading systems:
Inprevious articles, we mostly emphasized that the psychological aspect of trading plays a fundamental role.Human being can’t be as disciplined as machines as we are often influencedby emotional situations.
The problem faced by those who work in a discretionary way is the frequent emotional tricks, which often leads to trivial mistakes that could have been avoided. Software is not influenced by personalparameters such as emotions, therefore removing emotional risks from the equation.
In semi-automated trading, the software offers its recommendations, and the trader decides whether to initiate a trade or not. This feature is present, but in less frequent.
We further recommend reading the articles section of MONEY MANAGEMENT
Those who deploy automated trading systems are not forced to keep track of the markets at all times of the day. This means lower stress and more time for research and testing new strategies. Stress or anxiety is the main cause of overtrading, and as we know holding over traded positions for a long session often leads to a number of mistakes. Autotrading allows you to have a better quality of life.
Whetherthe auto trading software isa commercially available version of a specialized company or it wasdeveloped by an individual trader, the undeniable advantage is the ability tobacktestthe software on a longhistory of data. This allows us to understand the strategy’s validity and effectiveness in the past.
With the software’s strategy embedded,this allows for strategyreview from back test results, followed by a decision to improve or simply forget the strategy.
Information released by different backtests can reveal important aspects to the trader such as the persistence of a result over time, or the correct settings of an indicator. It can even reveal that some strategies that seem to work perfectly, actually don’t always work consistently on certain types of assets.
All this would be basically impossible on short historical time frames without automated trading software. We recommend reading the article titled STRATEGY TESTING
This type of trading involves a trader to simultaneously work with more software working on different strategies. This is an important success key used as a form of diversification of trading strategies and logic thereby making it much less risky.
Deploying this strategywith traditional trading was incredibly difficult to pull off.
Having one or more software working in autotrading on different assets and on different timeframes will allow you to have active trades10 or 20 times higher than the number of trades you can open if you were working manually.
Though with low-profit, high-frequency auto trading would allow us to make more profitable investmentscompared to a profitable trading strategy done manually.
But beware: unprofitable autotrading with many operations simultaneously could be deadly.
At the end of this brief overview on the benefits of automatic trading, it’s worth highlighting some critical criteria for those who besides focusing on commercial products, wish to automate their own strategies by creating software for it.This path involves an immenseknowledge on computer science,programming languages, which are out of the trading knowledge.
For those who are not programmers, the advice is to outsource that to experienced people (who can be found on a marketplace like Upwork or Freelancer). Beware that they will be available for corrections or updates.
If you are new to programming, it’s advised to forget extremely complicated machine languages, such as those written in C ++ (the language of MT4/5) and use the platforms that allow for simpler languages.