My trade system
Probably many of you have heard about automated trading system. Well as an investor I have used it all the time. The computer-based application is set up to automatically sell and buy securities on an exchange. Al that needs to be done is to subscribe to an automated trading service and find your account, because is automated there is no need to spend long time reviewing how the system works. In mean time, if you find out that you don’t like a particular service you can easily unsubscribe and move to another one.
It’s very simple to get start automated trading. There are many services to choose from, and with signing up with one of them, you are actually making a strategy for trading stocks, options and even you can use foreign currency. When I was ready with the trading strategy I opened an online account with broker or you could also just sync the automated trading account with an existing brokerage account.
The best use
Next was when the system takes over and executes the strategy I have chosen because this type of trading is based on algorithms and statistical data. I was able to track how my strategic trading was going, I was happy with the performance but there is option if you aren’t you could maintain the account.
It is lucky thin that you aren’t locked in the strategic picks and if security isn’t performing the way you like it, you could stop trading to prevent losses. Also there is option where you can delete position altogether if you decide security should not be part of the trading security.
Mostly all of the system requires frequent trading and at least $5,000. Don’t forget that every trade comes with commission that means that you will be paying fees for every trade you make.
So if frequent trade is your thing (like it is for me) you could puy your account on autopilot and this is what you will need to research further. Investors that are actively engaged in automated trading can improve their returns without spending a lot of energy researching securities. Many of automated trading systems use a combination of statistical analysis and technology to analyze security positions so that the things you don’t have time to research are taken care of for you. This is the best part that I like about.
Automated trading systems is for those who understand how the market works and want to have more control over their trading. Automatic trading can help you expand your asset classes, get into stocks you might not have known about and make money on more trades than you could with manual trading. It also can be used as a complement to manual trading in an online account in order to have the best of both. The automatic trading service is making the trades while I do research and exacting my transactions on the side.
I had the ability to turn precise entry, exit and money management rules into automated trading systems that allowed the computers to execute and monitor the trades. One of the biggest attractions of strategy that caught my eye is that the automation can take some of the emotion out of trading because trades are automatically placed than certain criteria are met.
Mechanical trading system as we know it like Automated trading systems, it is algorithmic trading, automated trading or system trading that allowed me to trade with established specific rules for both trade entries and exits and once I programmed it, I could automatically executed via a computer. I made the entry and exit rules on base simple conditions with moving average crossover and complicated strategies because I have knowledge of programming language specific to the trading platform or you can find a qualified programmer.
I minimized Emotions with Automated trading systems throughout the trading process. With keeping emotions in check I had an easier time sticking to the plan. Since the trades are automatically, traders will not hesitate or even question the trade.
Well there is one big question I have always asked myself, and finally I found what I needed. With the ability to backtest the historical market data will determine the viability of the idea. All rules need to e absolute, which means there is no room for interpretation, and of course the computer can’t make guesses, you need to tell it what to do. I took the precise sets of rules and I tested them on historical data before putting my money at risk in the live trading.
The preserve discipline – is automated trading that helped me ensure the discipline that is maintained because the trading plan is followed exactly. Also, the plot error is minimized and the order to buy shares will not be incorrectly entered as an order to sell shares.
I had my biggest challenges in trading, to plan the trade and then trade the plan; well there is when I achieve consistency. I didn’t ignore the rules when my trading plan had potential to be profitable, because if I sis it would altering any of expectancy that the system would have had. The automated trading system allowed me to achieve the consistency by trading the plan; actually it is impossible to avoid disaster without trading rules.
I improved order entry speed in order to get better results. The computers respond immediately in changing market conditions, automated system are able to generate order when the trade meets the criteria. It can make a big difference in the trade’s outcome if you get out of a trade a few seconds earlier. All the orders are automatically generates as soon as a position is entered, including the losses and profit targets.
Automated trading system permitted me to trade multiple accounts or various strategies at one time. It has the potential to spread risk over various instruments while creating a hedge against losing positions.
Emotions and automation system
Every millisecond passed counts in today’s markets. You can easily set the strategy or indicator, with TradeStation Chart Analysis and RadarScreen, to automate the trading in order to reduce the delays that occur in discretionary manual market entry and exit. By having the strategy monitor the market for the defined conditions will react to opportunities faster. With reducing emotion and increasing my trading discipline I traded with grater confidence.
Well you should know that fear and greed affect trades. I needed to make big effort in order to learn the markets and in return I became better decision maker. If you lack the time for discretionary trading, or maybe you would want to diversify into another trades , methodology. In both ways I had benefits from someone else’s efforts.
The system will trade only when its method tells it too, and it won’t change the number of contracts as it trades beyond the parameters I set in the beginning and the emotional side of the trading doesn’t affects decision-making.
Separating emotions from my trade executions actually didn’t remove my emotional attachment for the trading results. Well it sounds confusing because the goal of the system is to remove the emotions but actually when you trade you need to be disciplined, like any methodology you can have ups and downs and have a longer period without change. In the beginning I also got bored with the system and looked for the next best solution but as I sow it, it is normal to go through that for a system. But as the time passed and when I started the system at the right time it went positive but that is very rare odd.
I felt that automated system can effectively diversify a portfolio, and also I got important insights into market conditions, and I even helped some individuals that were learning to trade. A lot of systems look at long and short term trends which are hard for any trader to discern.
I the past few years there have been a numerous of vendors on the internet that guaranteeing results or exaggerating results and with that they are giving the wrong expectation as far as gains and it is simply dishonesty. No one can ensure a success on any given system, but there is diligence that the vendors are put trough in order to be sure that the execution of such system is in keeping the rules.
Here are some of the criteria that it helped me by examining them:
– Who has programmed the system?
– Has the trader traded real funds?
– What is the experience of the system developer?
– Is the frequency of trades realistic?
– Cost of the system.
Maybe some factors won’t mat but make sure, as I did, to consider the larger aspect of the experience in the markets when you interview vendors so that you could introduce their algorithmic solution. Best way is to find an expert for algorithms trading that will understand the trading statistics.