Automated Trading: How Does It Work And Should You Try It

Automated Trading: How Does It Work And Should You Try It


Automated trading is a trading method that uses a robot to place market orders instead of a human investor.

To do automated trading, you must open an account and set up the robot without knowledge of the market or computers. But is it practical and profitable?

The Principle Of Automatic Trading: Trading Without Understanding Anything About The Market?

It is effortless to get started in automated trading. Offers abound on the web. There is no need for advanced knowledge or training to get started. It, therefore, seems accessible to any beginner. However, the crucial point is to configure the robot to analyze the market and execute your orders according to your investment and risk-taking objectives.

It is, therefore, necessary to know enough about trading and financial markets to perform this configuration. Some brokers offer training and a demo account that allows you to practice.

How To Choose The Best Brokers And Robots For Auto Trading

To be able to use trading robots, you must first select an online broker that offers access to these robots. Not all brokers offer it. And many online trading sites are scams you must know how to spot.

Also, there is an option to choose the auto trading platform independent of the brokerage service. Just like when selecting the broker, choosing the software for auto trading requires you to do proper research.

How to proceed? Type the broker’s name or the software that interests you in Google and see what shows up. Read reviews, such as BitiCodes review, which detail the trading features of this recently launched platform. Also, check out the trading forums to see the opinions of active and previous platform users.

The Advantages And Disadvantages Of Automatic Trading

The use of automated trading has several advantages but also disadvantages. It is essential to take them into account before starting.

This makes it possible to invest in the financial markets without having in-depth knowledge and without spending a lot of time there.

Robots can analyze all market data very quickly and therefore make more informed decisions than a neophyte investor.

Automated trading regulations in the US - %

The speed of execution of robots allows them to analyze the market and place orders with unbeatable responsiveness to a human.

Robots are emotionless. They, therefore, apply the strategy for which they have been programmed without being influenced by negative or positive emotions.

They allow you to test your strategy on past data. Which can be useful to refine your strategy.

The main drawback is that you must constantly monitor the results to ensure the algorithm is working as expected. Otherwise, you can quickly rack up losses.

Another disadvantage, the robots do not follow the news. The robot will not take a sudden change in conditions into account. It will be up to you to re-parameterize the algorithm to adapt it to new market conditions.

Automatic trading is certainly the easiest and fastest way to trade. However, getting started without training or knowledge of trading is the surest way to lose money. It is, therefore, important to train in trading before attempting to use these robots to try your luck in the market.