The automated trading system also is known as the algorithmic trading model or mechanical trading method makes the life of trader much easier. According to recent statistics, more than 75% of shares traded in the U.S stock market is the result of algorithmic trading.
In the automated or algorithmic trading model, EAs and bots take care of the technical analysis section. This means you won’t have to rely on the heavy mathematical calculation to predict the potential price movement. The bots are uniquely designed to perform a series of mathematical calculations that will help you to make quick trading decisions.
The bots that are designed to auto trade the market are often ignored. Professional investors don’t like the concept of putting their money in the hands of a bunch of EAs or bot. Instead, they automate a certain portion of the trading method (more than 90% of the work is done by the bots). They just evaluate the decision of the bots and take the trades.
So, what are the key benefits of the automated trading system? Can we really make a profit by automating our trading? To find your answer, you need to know about the amazing benefits of automating your trading system.
Establishment of a genuine rule
The people who use the manual method and perform all the tasks at trading make many mistakes. In fact, most of the mistakes are the results of human error. Due to the very nature of the human being, it is very hard to stick to a fixed set of rules. Thus we break the rules and fail to establish yourself in the professional trading community.
In the past, people used to think emotional attachment is the key reason to break the rules. The statement was very true and for this reason, they used to maintain a trading journal. Though it can make you a disciplined trader to a certain extent the use of bots is a more superior technique to protect the funds.
With the help of an automated trading method, all the complicated tasks are done by the bots. When the complex calculation is done by the bots, you can focus more on the guideline. It’s more like assessing the trade setups of another period. We all know how easy it is to find the faults in other people trading methods. So, when you analyze the trading signal from a bot, it becomes easier to filter out the best possible trade signals.
Minimize the emotional attachment
The automated trading system relies on mathematical formulas. The programmers embedded the trading method with the help of a bunch of codes. There is no way, the bots are going to be emotional and create reports biased with emotions.
In a nutshell, we can say the trades are executed with the bots. This also helps you to avoid emotions. For instance, many people wait to pull the trigger and fail to get a better price. On the contrary, the bots can take the trade as soon as the conditions are filled. So, you are basically using an optimized trading method by which you can win most of the trades.
Diversify your trading method
Everyone is using one or two unique methods to analyze the price movement. But the bots can be programmed to look at the price pattern in many different ways. In fact, it can monitor the price movement of several assets without having any technical failure. Eventually, it creates the opportunity to diversify the risk factors at trading. When you take the trades in different currency pairs or assets, it becomes easier to manage the risk. In fact, it helps you to make the perfect decision as you get more options.
The automated trading system can evaluate multiple trade setups and execute orders on the best possible setups. Such analysis needs to be done in a very quick manner and only the programmable bots can perform this task. If human beings are assigned to do this task, they will spend huge amounts of time analyzing multiple assets and thus they won’t be able to execute the quality trades. For this reason, the manual trading method limits the selections of the asset.
Monitoring the bots
Trading bots or the algorithmic trading method might have exclusive features that can help you to become a successful trader. However, you must manually monitor the price and be cautious about the technical failure. In fact, faulty programming can create latency issues that will eventually lead to poor trade execution and slippage. You have to carefully select the trading bots and monitor the performance. Use the manual method to see the performance of the bots is up to the mark. If not, uninstall the trading bots or connect it to a demo account and try to fix the faults.