The Trading, which is done using a computer program, is known as Automated Trading. Automated Trading is also known by other names like Algo trading and Algorithmic Trading. Automated Trading makes the trade a more straightforward process. In automated Trading, one just has to set the rules that the system needs to follow to operate. This trading system works much more efficiently than manual trading systems.
Using an automated trading system makes you tension free as you only have to set up the system with your instructions, and it will work accordingly. A single system manages all the trade. Traditional systems require more time and manual work, but this automated trading system has made all the work trouble-free. By an automated trading system, trade can be made with efficiency, and the outcome will be best for the trader. In the Traditional trading system, it is quite difficult to make calculations quickly and take action, but an automated trading system works quickly when it spots any profit opportunity.
Automated Trading systems have several benefits over traditional trading systems. Automated Trading is done by the computer program, therefore, reducing manual work. The time taken by the computer system is very less. It performs its functions very efficiently and in less time. The main benefit of automated trading systems is that emotions are being removed as if the trader is going to do trade manually, then due to his emotions, he can delay or stop, but the machine won’t make any delay. The computer system will only work according to the instructions given to it, free from any kind of emotions.
In an automated trading system, a process of backtesting can be followed before actual Trading; then, the trading strategies can be assigned after the trial. This computer trading executes fastly and more efficiently than traditional Trading. In automated Trading, human intervention is very less due to which quick decisions can be made. The system notices profit opportunities very fast and works upon them. For human traders, it becomes difficult to spot such opportunities quickly, like the computer system.
For large institutions, these automated trading systems are much beneficial, which deals with a huge amount of shares. This automated trading system has overall many benefits over traditional trading systems. Due to all these benefits only it has become very popular in no time. The main benefits of the automated trading system are:
- There is no human intervention in trade.
- In Trading, emotions are removed.
- Less time is taken to perform actions.
- Orders are processed according to the set of rules quoted by the trader.