Why experts say you should always trade with automated software
Automated trading software — also referred to as trading bots, autotraders, EAs — allow traders to establish specific rules for both trade entries and exits that, once programmed, can be automatically executed via a trading bot.
In fact, various platforms report 70% to 80% or more of shares traded on U.S. stock exchanges come from automatic trading systems. I have been using several trading bots, and I’m currently using Galileo FX Pro.
Advantages of Trading Bots
There is a long list of advantages to having a Trading Bot monitor the markets for trading opportunities and execute the trades, including:
Automated trading systems minimize emotions throughout the trading process. By keeping emotions in check, traders typically have an easier time sticking to the plan.
Since trade orders are executed automatically once the trade rules have been met, traders will not be able to hesitate or question the trade.
Backtesting applies trading rules to historical market data to determine the viability of the idea. When designing a system for automated trading, all rules need to be absolute, with no room for interpretation.
The trading bot cannot make guesses and it has to be told exactly what to do.
Traders can take these precise sets of rules and test them on historical data before risking money in live trading.
Because trade rules are established and trade execution is performed automatically, discipline is preserved even in volatile markets.
Discipline is often lost due to emotional factors such as fear of taking a loss, or the desire to eke out a little more profit from a trade.
Automated trading helps ensure discipline is maintained because the trading plan will be followed exactly. In addition, “pilot error” is minimized. For instance, if an order to buy 100 shares will not be incorrectly entered as an order to sell 1,000 shares.
Improving Order Entry Speed
Since trading bots respond immediately to changing market conditions, automated systems are able to generate orders as soon as trade criteria are met.
Getting in or out of a trade a few seconds earlier can make a big difference in the trade’s outcome. As soon as a position is entered, all other orders are automatically generated, including protective stop losses and profit targets.
Automated trading systems permit the user to trade multiple accounts or various strategies at one time. This has the potential to spread risk over various instruments while creating a hedge against losing positions.
What would be incredibly challenging for a human to accomplish is efficiently executed by a computer in milliseconds.
The computer is able to scan for trading opportunities across a range of markets, generate orders and monitor trades.
Best Trading Bot
I have been using several trading bots. Galileo FX Pro has been my #1 top pick for a long time. You can read my review of Galileo FX here.