What Trading News Never Reveals About Trading Strategy Software

The automated trading strategy also known as algorithmic trading is a system whereby a trader can set specific rules for entry and exit; pre-programmed, the entry and exit points can be automatically executed by a computer. These can be either very simple, such as pre-set rules that tell the computer at which point to enter and then to exit, only once a moving crossover average has been reached. Or, they can be very complicated, for which it would need a programmer to write specific programming code, for that particular platform.

Strategy building wizards are used on some trading platforms, whereby users select from a list of indicators, building a set of rules, for automated trading. The advantages of this system are many, including the ability to backtest. This means that the user has access to historical data, to test for the viability of his trading ideas, allowing the trader to fine-tune, add things like my crypto wallet, and evaluate his concept, and the average amount of his win or loss risk. This trading strategy works, as the rules then set are absolute, with no room for guesses. The automated trading system lets the trader achieve consistency if he applies the rules he has pre-set.

Another advantage is improved order entry speed. The automated trading system responds immediately to changing market conditions, thereby, the system can generate an order as soon as the trade criteria set up by the trader is met. For entry and exiting strategies, the few seconds saved can make a big difference in profit or loss, and this is one huge benefit of automated trading strategies.

The disadvantages include mechanical failure, whereby an order resides on a computer, not a server, and losing an internet connection means the order never reaches the market. A new trader should start with small trades, to evaluate the system first.