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Automated Trading: when to buy and when to sell

Automated Trading: when to buy and when to sell

Content:

1. What is Automated Trading?

2. The Pros and Cons of Automated Trading

3. Fintatech Software for Automated Trading

4. Conclusion

A substantial challenge for all traders is taking control over the emotional component, as it can affect the trade, their ability to make decisions, and to operate with an acute mind. In this case, Automated Trading can come to assistance and make all turns computerized, leaving no room for human-natured problems. Therefore, on average, 80% of shares in the USA are conducted by automated trading systems.

1. What is Automated Trading?

Automated Trading is a special algorithm enabling traders to introduce personalized rules to control entries and exits. As soon as the rules are established, the software performs the actions automatically. Participants set the exact entry, exit, and money management rules, and the process begins. The trade meets success once all conditions are carried out, not sparing a moment on manual making decisions. Traders can install customized rules, depending on their needs. It can be either basic conditions or complex techniques which need to be developed by professional programmers or experts on the trading platforms. 

Trading platforms present a ready-made list of indicators, which traders could include in their rules to establish an automated process. Alternatively, traders have the possibility to make up personalized indicators and hire a programmer to build them in order to add more adjustable features to the software solution. According to the scripting, the rules are fixed, and the program starts tracking the markets and detecting the moment to buy or sell. It enables protection from losses and trailing stops, which is impossible to fulfill non-mechanically.

2. The Pros and Cons of Automated Trading

Advantages:

Non-personality

With the help of Automated trading, traders escape from the risk of spontaneous decisions or, on the contrary — do not spend excessive time making them. The trade is done at the moment when the set-ups match without every additional approval to be received.

Secondary Analyses

The Backtesting technique means that the trading rules set by the traders are checked on the information obtained from the previous trades. It helps to test the system’s viability and outline the anticipated results. Investing money without preliminary testing is risk-taking; thus, developers enable the backtesting function to clarify the rules, which must be established clearly so as not to be misapprehended by the computer.  

Discipline

Automated Trading can conquer even volatile markets as it is not influenced by emotions but conducted automatically. A computerized system has no fear, no greed, or regret so that the results of your trade would not be affected by them. Having numerous losses in the course of trading, a person certainly will take precautions, standstill, or even exit trades. The automated program anticipates the most suitable time, enters and exits exactly when it is needed as well as does not despair or overjoy. The processes are executed consistently, without emotional fluctuation.

Acceleration

As all moves are made automatically, the algorithm can enter or exit the trade promptly as the conditions have been changed. Even a few seconds of delay when the trade is managed manually results in significant losses of money. Due to this technology, traders do not have to constantly monitor the market, create loads of strategies and test them immediately. They can install all these features into the system and get the automated algorithm working on them.

Multiple Accounts

ATS enables building as many strategies and accounts as needed for a successful deal. Within a second computer, generate orders and monitor trades and trading opportunities. Moreover, it distributes the risk of failure among the different features of the program, proving the stability of the trade while the trader has free time for more important endeavors.

Disadvantages:

Even though the list of advantages is quite extended and convincing, still some drawbacks can occur, and each trader must be aware of such possibilities.

Technical Issues

Every computer is predisposed to damage. An automated trader system is often installed on a computer, not a server; that is why the risk of data loss can happen when the internet connection is lost, or the computer broke down. Experienced users of ATS suggest primarily trying to trade on the small amounts and then when all processes are proved to work trouble-free, launch large-scale trading.

Monitoring

There is no fully autonomic system yet. Although ATS frees lots of time for other processes, it requires regular monitoring on behalf of the trader in order to prevent or resolve some computer problems, orders discrepancy, or other unpredictable errors.

3. Fintatech Software for Automated Trading

A ready-made Automated trading system is a beneficial option as it saves time, can be customized especially for the client’s needs, provides the ability to change the platform out of charge, and has the potential to be sold to another trader after installing some additional features.

Fintatech Software – is a decision that meets modern requirements and brings forth successful automated trading. For that, Fintatech Solution has Scripting.

Fintatech Scripts Manager is a tool allowing customers to write their personal scripts; basically, bots that can trade independently. At first, traders establish the set of rules and strategies which will be executed by the program. Subsequently, the program compiles the data and uploads it to a server, launching the generation of Trades and Orders.

Automated trading Fintatech Solution consists of two parts: Running Scripts and Backtesting.

Running Scripts is real-time automated trading. As soon as the prices are received, the bot responds to them and initiates further actions — buys or sells. The system admits the simultaneous setup of multiple scripts and their management. They can be stopped or suspended in order to make some adjustments.

Backtesting

Backtesting is executed on historical market data. It allows traders to evaluate the work of the script and test it. At the same time, no trading transactions will be conducted. This is a simulation that allows you to see the work of a written Scripts Manager. If the Script succeeds in showing historical data, it will be able to work correctly and in real-time in Running Scripts mode.

You can choose any preferred strategy for Backtesting, and To do this, you need to select the symbol on which you want to run it, TimeFrame, the amount of historical data, register virtual funds, and then start work.

The bot will generate all operations and show how everything was done in history.

Namely, it will be possible to view:

Summary – the overall result of the bot: how many purchases and sales were made, whether these operations were winning or losing

Trades – the ability to view each trade separately and with details

Orders – the ability to view each order individually and with details

Chart – allows you to see the visualized image of transactions in the form of a chart (the place on which the order was opened and closed)

Automated trading is an innovative feature. Fintatech Trading Software Solutions allows you to customize and control this process as comfortably as possible for the user. If necessary, the functionality can be expanded or implemented according to the needs of your business. With clear logic, our professional developers can convert it to a script.

Automated trading with Fintatech Trading Software Solutions brings only benefits and optimizes all processes.

4. Conclusion

Being a trader, it is necessary to acknowledge the benefits and drawbacks of implying the automated trading software. It can result in huge profit for the users if it is used properly, according to all precautions and instructions. Fintatech Trading Software excludes the risks of failure and extensively manages the process of trading. Resolving to buy a stable and reliable trading software – contact our manager. A good trade is a key to success; let’s embrace it! 

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