Automated trading is done through a program or algorithm that analyzes the market and places orders automatically, i.e., without the trader’s intervention. It can also be done simply with a trading platform’s functionalities (stop loss, take profit). In any case, the trader always sets the parameters to the automatic trading program or algorithm beforehand, which tells the program what to do, when, under what conditions, etc.
Automatic trading is the ideal method to eliminate the influence of emotions in your trading activity, avoid monitoring your positions continuously and take advantage of market opportunities automatically.
Several platforms can claim to be the top-notch solution. Among them are Meta trader 4 and 5, Zulu Trade, Centobot, and one of the recently developed ones – Biticodes. They are simple to use and well regulated. They are also proud of their high effectiveness and prediction accuracy. Also, some of these algorithms are multi-asset, and some are focused on only one asset, such as Biticodes, which deals with crypto trading. For more info, you can check out the Biticodes review.
- Choosing the right auto-trading platform allows you to trade in the best conditions and take advantage of the best algorithmic trading programs.
- Clearly define the auto-trading parameters: it is a question of configuring the elements of your trading strategy, namely the stop loss, take profit, type of strategy to use, etc.
- Have good timing: you must carefully analyze the period in which you want to take a position in the financial market. Timing positions is essential, and this is done by following market trends and signals.
- Consider the limitations of backtesting: Backtesting has limitations because it doesn’t always count for sudden changes in asset prices, technical/operational issues, and other market conditions.
- Test your strategies using a demo account: it is always recommended to test your strategy on a demo trading account before improving or implementing them on the real account. That guarantees you solid results because you will have already tested the system over a more or less significant period.
Automated trading offers several advantages to the trader, such as the speed and accuracy of order entry. However, the risks are real for its followers. A technical or hardware failure can drain a trader’s wallet. In addition, an ill-justified software error can affect your trading operations and profitability. It is therefore essential to follow the advice of the experts to minimize the risks and optimize your gains.
Finally, the success rate in your trading journey will largely depend on the choice of the software, But what characteristics to follow and how to choose the best one for your trading business. Well, the market is saturated with offers, but that shouldn’t discourage you.
When opting for your software, check the forums and see what other users have to say about the specific software. When you narrow your list, try out all the options using the demo account. Go for the one with the best user interface, efficient customer support, decent profitability rate, and of course, reasonable price.