Why should you Opt for Auto Trading?

by Algomaker India Algorithmic Trading companies in India

Most of us have heard about auto trading with the likes of binary options, but what are the pros and cons? What is auto trading and by clicking on something, can it help you earn money?

Therefore, if you are interested in learning more about automated trading and making a difference in your life without much effort, read on to find out more.

What is the concept of auto trading?

Simply put, auto trading refers to the concept of trading on autopilot. According to TheStreet.com, an auto trader could be anyone who follows a certain set of rules that when followed can ensure success. The source further goes on to define, "Auto traders are people who make decisions based on various signals that they receive through various online sources. Some traders receive signals from the brokers that they are using, trends in price movements and also following the recommendations of other traders."

In simpler terms, auto trading is a technique used by professional and novice traders alike to earn money. This method is widely used because it allows you to make trades on your own time while you are doing some other work. It is a very useful tool in making profits but can also be risky at times if you have no idea what you are doing.

Main advantages of auto trading:

1. The convenience of trading

2. Can help you earn money in your sleep as it is mainly used at night when the stock market is open. This makes it easier for you to earn more during times when most people are fast asleep.

3. Can be used on any device such as a computer, tablet, or Smartphone as long as you have your trading account and accounts with different brokers set up and ready for trading.

What are the disadvantages of auto trading?

Other than the ultimate risk of being wrong, automatic trading can lead to many more problems. Auto traders are at the mercy of market swings and do not have a chance to profit as successfully as manual traders. Moreover, they must place orders that may take hours or days to execute. To make matters worse, automatic trading software can never be as sophisticated as what manual traders have at their disposal.

Although automated trading is very prevalent, only 15% of stock market participants are using it for their investment strategies.

• You cannot be taking part in the market during your trades

For example, certain stocks may be having a great run while others might be dying. Auto trading systems usually do not take part in the market when it's making big moves up or down. Instead, they simply keep your orders for you and put them in when the time is about right even if you are sleeping or unable to trade at that time. Although "jamming" the order through might sometimes is beneficial to a trader, it is often overlooked.

• Auto trading systems are highly susceptible to problems when used for a long time

This can be from anything from human error in entering a trade or systematic errors in the software itself. Either way, it will cost you more money than if you were simply executing the trades yourself without any software or system in place.