It is a trading method that depends on the trader in the implementation of orders to buy and sell automatically. Under this method, laws are designed to buy and sell the financial asset and the centers are executed when these conditions are met. This method is called automatic trading in relation to the need to open and close transactions by the trader manually.
What are the main reasons for the increase in the demand for automated trading?
As time passed and technology progressed, there was a growing interest in trading automatically. In fact, this method is used in many financial markets such as stock market, futures, currency market and other markets. There are several reasons to explain this turnout:
No need to track market movements permanently and monitor markets throughout the day. When selling and buying rules are programmed, transactions can be executed automatically without the need to manually open a position. This will help the trader not to monitor market movements permanently.
Ability to track multiple assets at once. Trading a lot of financial assets at the same time may not be easy for short-term traders. Automated trading helps you track and speculate on multiple financial assets simultaneously. These opportunities may exist in different assets and it is difficult to execute transactions manually on them.
Speed in implementation. When the conditions for opening and closing positions are met according to the rules of the trading strategy, the ability of the computer to implement the center may exceed the human reaction. The speed of execution plays an important role in the trading world. The more speed, the greater the chances of getting the right price.
Overcoming the psychological factor in trading. The psychological factor may affect investment decision making, the use of automated trading method will overcome the psychological worker's handicap when the terms of sale and purchase are met.
When programming the buying and selling rules, the trader can rely on several variables to make investment decisions. There are those who rely on technical indicators that start with simple laws such as the intersection of simple moving averages or the construction of algorithms that process several technical indicators at the same time and may be more complex, movements of price behavior around important courses such as the beginning of the London session or the programming of laws based on economic data such as Non-agricultural jobs in the United States. The advantages of trading are not only the development of buy and sell laws, but laws that manage the concept of risk management can be programmed in circulation automatically.
Platforms enable the ability to test the effectiveness of the strategy over past prices in order to improve the performance of this method on the virtual trading, which helps the investor to improve the strategy and thus achieve the objectives of investment according to a systematic plan drawn directly.