Automated Trading System
What is an Automated Trading System?
In the world of trading, emotions often play a disadvantageous role in our ability to make the right decisions and to adhere to a trading plan. The Automated Trading System is developed to solve this problem by taking the emotional portion out of stock investing. Rather than making human decisions to enter or exit a trade, an Automated Trading System utilizes pre-programmed rules and criteria as a basis for taking action in the market. Thus, traders no longer need to be physically and emotionally involved when stock investing, but rather allowing online trading to be at auto-pilot.
How does it work?
The Automated Trading System is an application that consists of a full-suite of controls, variables, constraints and boundaries typically for online trading. The trader would first need to develop a system with parameters and variables specified. These constraints and rules would then need to be verbalized in a form that can be input into the Automated Trading System (Investopedia).
The amount of control given to the Automated Trading System is also at the prerogative of the trader. If a trader wishes to only trade on one stock, this can be specified within the system. Also, the trader is able to instruct the system to go long based on certain conditions, and to go short if alternate conditions occur.
Additionally, trailing stops and partial orders are also possible with a trading system. This gives the trader the flexibility of not being in front of the computer monitor the entire time. Also, with time based constraints incorporated into the system, the trader is also able to specify which time frames are active trading hours. This would be especially useful for online trading in overseas markets (Wikipedia).
Fringe benefits of an Automated Trading System
While automation is the key function of the Automated Trading System, manual online trading through the view of charts and stock information is also possible. This means that traders are able to utilize the application to place trade orders manually, to view account balances and also to view breaking news that are streamed into the system. In addition, hot keys may also be programmed into the Automated Trading System to allow for a faster action and response.
Finally, the Automated Trading System is revolutionary in changing the way we make money from the markets (CoolTrade). We are now also able to respond quickly to changing market environments through the help of automation, and thus increase the probability of profiting from our trades.
References:
CoolTrade (Recommended)
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