Automated trading software is increasingly used by both novice and experienced traders worldwide. Its advantages are numerous, so if you still hesitate to start using it, you should rethink it. Thanks to the trading bot, you can increase your chances of making profits in whatever market you choose.
Why Do Automated Trading?
Because it reduces the emotional impact on the trader and allows him to place several orders simultaneously and very quickly, the software identifies the best opportunities on the financial market. It offers them to the trader (semi-automatic trading) or places orders independently to take advantage of these opportunities (fully automatic trading).
Automatic trading: mistakes to avoid for beginners
- Create a universal trading strategy: there is no universal trading system because each system only works on a specific asset. That’s why it is recommended to always change your strategy when you choose to trade on a new financial asset.
- Not knowing the underlying asset well: an automatic trader needs to identify the underlying of the asset he is trading, its particularities (risks, return), and the elements that influence the evolution of its Classes. Then, you must question the relevance of the indicators and data relating to the chosen asset or that you are trading before creating your auto-trading system.
- Ignoring fees: Fees and commissions should be considered when getting into automated trading. You should carefully analyze these fees, whether brokerage fees/commissions or the possible cost of purchasing an algorithm.
- Consider only technical analysis: there is not only technical analysis as a trading indicator. For a successful auto-trading experience, it is better to opt for a combination of indicators to adapt your strategy to the realities and particularities of the asset to be traded.
- Do not use multiple parameters when testing: again, novice traders forget to vary the parameters during the backtesting optimization of the algorithm. It’s a mistake, and novice traders must subject the software to different market conditions.
How to Use Automated Trading Software?
Start by choosing a reliable and regulated trading platform. Next, define your trading plan and strategy. Choose the auto-trading software of your choice and set the conditions and rules that the program will execute. Then, you have to backtest your strategy and optimize it if the test results are unsatisfactory. When done, you can configure your program and launch it.
What Software Can You Use to Automate Trading?
The offer is huge, but you can opt for ZuluTrade, MetaTrader (MT4 and MT5), DupliTrade, TradingView, Biticodes, and ProRealTime. These are just a couple of the most prominent names. However, before choosing the one, you need to do your own research and read many reviews, such as Biticodes review, for instance, if it’s the software that particularly draws your attention. Then you try out the demo version of the platform to see if it fits your expectations.
Can Novice Traders Do Automated Trading?
Yes, all traders, novice or experienced, can use auto trading software. It has been designed to make it easier for all traders who want to take advantage of technological advances to boost their performance in the financial market.