Investing Online: Should You Consider Automated Trading for Your Online Investments?
Various firms offer online investments such as stocks, futures, bonds, gold and Forex inclusive of others.
You can opt to automate your investments by using desktop or web-based automated trading tools.
For desktop-based platform, you need to have a computer, market data, brokerage firm, Internet, trading and charting software and backup internet access among other tools.
Certain aspects such as quantity of order, price and timing come into play when trading your investments using automatic trading platforms.
Computers execute and monitor trades on your behalf, which is faster than if you or your broker worked manually.
This can give you a huge advantage over the competition.
Specific rules for trade entries and exits are programmed and executed by the computer.
Once you have the right technological platform and analysis tools, you can create your investment strategy and automate it.
You can test your strategy with data from the past and automate it.
To ensure efficiency, you may need to adjust it when the market changes.
Advantages of automated trading
Automated trading can help curb fear, poor time management and greed which limit one's success when trading online.
Emotions may lead to poor money management and you may have difficulties sticking to your trading plan.
You can keep your emotions in check when you automate your online investment.
You can use the help of a trading advisor to instruct the system to move according to your trade signals.
There is little chance for the computer to ignore the rules leading to altering the system's expectancy.
This helps to spread the risk and hedge against your current positions.
Disadvantages
Therefore, you may require monitoring it to ensure its working correctly.
Market orders may not be sent to the market.
Robots and other automated trading tools can be very useful when trying to enter a new market.
They will follow the parameters you set and trade on your behalf.
There is little input required once they are up and running.
However keep in mind that no there is not a perfect robot or program and that there are times when drastic changes in the market can make even the best robots lose your money.
It is up to you if you are willing to let a robot make decisions or if you are more confident in taking your own risks on the market.
You can opt to automate your investments by using desktop or web-based automated trading tools.
For desktop-based platform, you need to have a computer, market data, brokerage firm, Internet, trading and charting software and backup internet access among other tools.
Certain aspects such as quantity of order, price and timing come into play when trading your investments using automatic trading platforms.
Computers execute and monitor trades on your behalf, which is faster than if you or your broker worked manually.
This can give you a huge advantage over the competition.
Specific rules for trade entries and exits are programmed and executed by the computer.
Once you have the right technological platform and analysis tools, you can create your investment strategy and automate it.
You can test your strategy with data from the past and automate it.
To ensure efficiency, you may need to adjust it when the market changes.
Advantages of automated trading
- Alleviates emotions
Automated trading can help curb fear, poor time management and greed which limit one's success when trading online.
Emotions may lead to poor money management and you may have difficulties sticking to your trading plan.
You can keep your emotions in check when you automate your online investment.
- Personalized trading instructions
You can use the help of a trading advisor to instruct the system to move according to your trade signals.
- Consistency
There is little chance for the computer to ignore the rules leading to altering the system's expectancy.
- Diversify trading
This helps to spread the risk and hedge against your current positions.
Disadvantages
- Monitoring anomalies
Therefore, you may require monitoring it to ensure its working correctly.
- Mechanical failures
Market orders may not be sent to the market.
- No natural adaptation
Robots and other automated trading tools can be very useful when trying to enter a new market.
They will follow the parameters you set and trade on your behalf.
There is little input required once they are up and running.
However keep in mind that no there is not a perfect robot or program and that there are times when drastic changes in the market can make even the best robots lose your money.
It is up to you if you are willing to let a robot make decisions or if you are more confident in taking your own risks on the market.
