How to use Automated trading?

Automated trading has become more and more popular over the past few years. This is perceived as the best way for novice traders to enter the markets and the trading world, without putting in the immense amount of time and effort needed to master the markets while creating and maintaining profitability and stability.

Automated trading, which is also known as Robot Trading, Bot Trading, Black Box trading and Algorithmic Trading; can be done using several tools. On Metatrader4, a common trading platform they may also be referred to as Expert Advisors (EA’s).

In algorithmic trading, many different technical indicators are used to define order entry and exit points. All forms of Automated trading strategies place orders automatically and submit them to a market center, exchange or ECN (the broker).

There are basic predefined sets of rules based on technical analysis, but not limited to it. Algorithms may also be based on additional inputs from various electronic resources.

How can an individual get involved in Algorithmic Trading?

There are many types of Automated trading. You can:

Set-up a multi-million trading account: You can open a perpetual fund with large trading firms, such as hedge funds, investment banks, and proprietary trading firms which are usually for people with a higher net worth and a large amount of entry-level initial deposits.

However, as an individual looking into Automated Trading, finding a solid strategy is not an easy task, here are your options:

  • Build it on your own: You can try to develop one on your own, keeping in mind that building an algorithmic trading software takes time, effort and a great amount of knowledge both in coding and in the markets themselves, and still may not be foolproof.
  • Pay someone to code it for you: Another option is to pay someone to develop an algorithmic trading system for you. You can hire someone with the needed computer programming knowledge to program the required trading strategy and have them create it for you. Keep in mind that even then it is not something to set and forget, the program needs to be constantly checked and requires manual intervention and constant updating according to market changes.
  • Buy Pre-made service: An additional option is to buy a pre-made trading software, paying a substantial amount of money, and still not knowing it’s quality. There are endless amounts of Automated trading systems on the web just waiting for you to buy them. How do you know if it’s a trustworthy system? Does it have loopholes? Will it comply with your best interest?
  • Join an Automated trading platform: There are various types of Automated trading platforms, which offer Copy trading solutions for both new and experienced traders. When copy trading, you can copy the actions of other traders and thus create a rich portfolio. This solution is great for novice traders who don’t have advanced trading skills nor the time to study the markets through and through. This solution is easy to configure, all you need is to choose a platform you wish to join and start trading like a pro. Keep in mind that you not only need to look for the right traders to copy but also for properly regulated brokers that offer the best trading conditions. This solution is relatively cheap, gets you extensive support and complete transparent data.

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