Why do we require an Automated Trading system?
Before moving further, first it is important to know what trade is. Trade involves the buying and selling of goods and services for sales or money. As technology is advancing day by day, we have many trading technologies, one is an automated trading system.
Automated trading systems are becoming more popular and are used by traders and investors. These systems monitor and execute the trade automatically. Also, they offer continuous trade executions, 24 hours a day, 7 days a week. As we know that market conditions are changing rapidly, a human trader can’t sit all day and look for the changing market conditions. But with the help of an automated trading system, you do not have to worry, you can sit back and relax easily because it helps watch markets and your stock portfolio.
An automated trading system is known as algorithmic trading or system trading. It allows the traders to set entry and exit trade rules and execute the trade automatically. There are endless advantages of automated trading systems. Some of them are given below:
1. Faster than human:
Automated trading systems generate orders as soon as trade rules are satisfied. Automated trading systems can scan and execute thousands of trades in a fraction of seconds which is not possible for a human trader to achieve. Thus automated systems are much faster than a human.
Automating trading is much more cost-effective in the long run than the other system. Moreover, this trading system is capable of preserving discipline in volatile markets and ensuring discipline that is lost due to emotional factors.
3. Less Time consuming:
With the help of an automated trading system, you do not have to spend hours watching market conditions and your stock. You can sit back and relax because an automated trading system will do it for you. It does not consume much of your time as well as in a limited time it offers you profitable trading.
4. Improves Trading:
Automated trading systems eliminate human emotions like fear, greed, etc. from trading. This trading system has its strict set of rules to execute your strategy and focus on consistent execution which in result improves trading.
5. Boost profits:
With the help of automated trading systems, a user can trade multiple accounts at one time. Automated trading systems provide accurate as well as profitable results. They do not involve human intervention and perform tasks in a much better way.
6. Reduce human mistakes:
Since trades are automatically executed through a computer, it reduces the chances of manual errors when placing a trade. Automated trading systems also prevent the pitfalls of putting you in the wrong trade. Moreover, it does not involve any human intervention also.