One of the most exciting aspects of trading is the automated futures trading systems. It brings mystery and awe to the trading world. The terms like high-frequency trading, algo-trading, and more than used in the market.
Automated trading is not surprising after all. It is just simple software that makes decisions depending on the conditions you set up. Automate futures trading systems can be more advanced. Regardless of the complexity of the automated trading software, the fundamentals remain the same.
As traders, you can build the automated trading algorithm based on either technical indicators or tailored indicators and other tools.
Why do traders use automated trading software?
There are a lot of advantages to automated day software. Most importantly, trading is based on rules and calculations, and it rules out emotions. Taking decisions with your emotional intent is the major challenge for the traders regardless of whether you are experienced and novice.
Even a single winning trade followed by series of others wins can build immense confidence in traders. Besides, it can lead to triumph. The market goes through minor or massive fluctuations now and then. Thus the most influential positions may also fall. Similarly, when you lost few times in a row, emotions can make you make impulsive or illogical decisions. Such a situation can lead to ignoring the strategies of risk management, misusing funds, and more.
Though emotions are a significant obstacle for the traders, you can easily overcome these with enough discipline and practice. Few traders prefer to use automated strategies, as they want to trade without emotions and also for several other reasons.
For instance, for some traders, chart watching can be a luxury, and some may take a handful of trades before they get back into their form. In situations like these, the automated day trade can help the traders. Moreover, for financial institutions and large banks, automated trading is a huge business.
Should you use automated trading?
It is more of a subject answer. Many of the traders approach manual trading. But, to be successful in this, you need to be patient and have control of their emotions while trading. On the other hand, some full-time experienced traders prefer automated trading algorithms over manual approaches. There could be several reasons behind it. However, ultimately it is up to you to determine whether you want automated futures trading systems and strategies or manually trading. In most situations, traders look forward to automated software they believe that they can automate winning strategies.
Just like you use macros in MS excel, small programs can do repetitive tasks. Such is the role of automatic trading. The automated trading algorithms can be built in numerous ways by either customizing the strategy yourself or having a programmer to code it for you. Another way is that you can purchase the automated futures trading system available in the market.
You can use automated futures trading systems according to your convenience. However, before using them, keep one thing in mind, they need to be forward tested and back-tested thoroughly to see if they can help you earn additional money in the market.