Johnson Walter

5 Advantages of Automated Trading

Algorithm trading is fast, relentless and reliable and has proved itself as the next step in the evolution of trading. In fact, 70-80% of the trades on NYSE and NASDAQ are generated by the automated trading systems. There are various automated trading systems to give a try like the 1G Profit System. Thanks to the continuous development in technology, it is now possible to run a multi account trading fund out of the basement of your house. Therefore, interest in automated trading is on hype as the individual traders look to be their own self-appointed fund managers. Here are some of the advantages:

Back testing the Results

Trying to back test manual trading strategies poses a series of challenges. This is not at all an issue with the automated systems. However, there are platforms that allow the user to back test a strategy at no cost to the user.

Overcome the Trading Challenges

The biggest difficulty that a trader faces is deciding when to pull the trigger. Traders who have struggled in the past or those who never mustered courage to trade on their own, an automated trading system offers them an alternative to a market which otherwise they would have not considered.

Diversification

There are many traders who enjoy running the systems while simultaneously placing the trades on their own.

Minimizes Emotions

The automated trading systems minimize emotions throughout the trading process. By keeping the emotions in control, the traders find easy sticking to their plans. Since the trade orders are executed automatically so once the trade rules have been met, the traders will not be able to question the trade.

Maintains the Discipline

Since the trade is executed automatically, a discipline is reserved even in the volatile markets. Discipline is often influenced because of emotional factors like fear of loss, or the desire to make it a little more profit from the trade. Automated trading helps in maintaining the discipline because the trading plan is followed exactly.

With automated trading, users can trade multiple accounts or multiple trade strategies simultaneously. The automated systems overcome all the disadvantages of human traders and can execute trades twenty four hours a day and seven days a week. One of the most significant advantages of automated trading is that it helps in recognizing the opportunities which are not available to the masses of traders.

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