Automated trading, also known as system trading or algorithmic trading, allows traders to set rules for both trade exits and entries. Once programmed, the trade can be carried out automatically through computer systems, thereby saving the trader’s time and mitigating the risk of errors.
If you want to succeed in the futures market, you must consider using a platform like Quant Terminal to formulate, monitor, and execute your trading plan. Using this platform, you can keep a look at the trends, analyze data, and apply formulas to purchase or sell orders. Are you still confused? Here you will see how automated trading can boost your trading profits.
Pushes Emotions Aside
Algorithmic trading minimizes emotions during the trading process. With this, you can stick to your plan and not get swayed away by emotions. Once the trade rules are met, trade orders are automatically executed, giving you no chance to question it. Automatic systems curb traders who tend to over-trade by purchasing and selling at every possible opportunity, thereby minimizing the risk of loss and increasing profits.
Allows Careful Backtesting
In the process of backtesting, automated systems apply trading rules to the historical market data and determine an idea’s viability. While creating an automated trading system, the developers use absolute rules only without any space for interpretation. When computers are involved, there is no room for making guesses, and it is preset to do whatever is required.
As a trader, you can test these specific rule sets and test them on market data before you risk your real money in trading. With careful backtesting, you can evaluate and tweak a trading idea and determine its success rate and expectancy. So, it can mitigate any risk involved and maximize your chances of profits.
Because there are established trade rules, and the trade is made automatically using automated trading, discipline can be preserved even in a volatile market condition. In the absence of automation, it is easy to lose discipline due to fear of loss or desire to earn more. However, an automated system ensures disciplined trading and binds you to follow the plan as designed.
One big challenge in trading is to make a plan and stick to it. The plan you make may have the profit potential, but sometimes you may feel convinced to ignore the rules and disturb the system’s expectancy.
You cannot succeed in trading every time, as losses are inevitable in the field. However, you can get seriously demotivated with subsequent losses, and you may ultimately decide to skip trading altogether. Automated trading platforms such as Quant Terminal allows you to achieve consistency by trading as per plan, thereby boosting your chance of gain.
Accelerates Order Entry
Since automated systems immediately respond to fluctuating conditions of the market, they can generate an order as soon as it meets the trade criteria. Even a matter of seconds can make a massive difference in the outcome. The system generates all the orders automatically as soon as you enter a position of loss or gain.
The trading market tends to move quickly, and it can be extremely demoralizing to skip the chance of profit. Automatic trading can prevent such a situation by trading at the right time, thereby increasing your chance of profit.
An automated trading system allows you to trade numerous accounts or apply multiple strategies at a time. With this, risk can be spread over different instruments while keeping you safe against losing positions. It is humanly impossible to execute a trade in milliseconds. However, the computerized system can scan trading opportunities through different markets, buy or sell orders, and keep an eye on the trades.
Now that you know how automated trading can boost your trading profits, use a reliable platform like Quant Terminal to make your plan, and start trading.