Traders and investors can convert the precise rules of entry, exit and money management into automated trading systems that allow computers to execute and monitor. Adani Enterprises Ltd (AEL)'s 20 billion rupee follow-up public offering (FPO) was fully subscribed on the last day of the offering, on Tuesday, January 31, thanks to late demand from family offices, companies and foreign investors. Automated trading systems use algorithmic trading to create buy and sell orders on the stock market or other exchanges. A computer program can be customized for specific trading strategies.
It places orders based on these predetermined strategies and guidelines that are programmed within the algorithms. It will be crucial that the algorithmic trading software you are using has sufficient connectivity to your broker's network or to an exchange to place trades. MetaTrader 4 (MT) is not a robot trading software, but it is one of the most popular currency trading platforms out there. Remember that you should have some experience and trading knowledge before you decide to use automated trading systems.
The following figure shows an example of an automated strategy that triggered three trades during a trading session. Some trading platforms have strategy creation assistants that allow users to select from a list of commonly available technical indicators to create a set of rules that can then be traded automatically. One of the biggest attractions of strategy automation is that it can take some of the excitement out of trading, since trades are performed automatically once certain criteria are met. With such a wide selection of robots and automatic trading EAs, MT4's automatic trading is likely to offer something for every type of trader.
One of the main advantages of using automated trading systems is the absence of emotions that are used in the trading process. Automatic trading performs operations on your account without the need for you to manually enter buy and sell orders. Because trading rules are established and trades are executed automatically, discipline is preserved even in volatile markets. Traders have the option of running their automated trading systems through a server-based trading platform.
Since many people who start trading tend to have limited knowledge of the trading process or financial markets, the popularity of these systems is not surprising. It's common for traders to use many different trading tools: a terminal for price analysis, another terminal from their broker for making trades, and a separate program for performing trend analysis. This is because the trading plan is being followed precisely, and there will be no opportunity to hold a trade a little longer to try to make more profits or sell early to avoid losses. The rules for entering and exiting trades can be based on simple conditions, such as a crossing of moving averages, or they can be complicated strategies that require a comprehensive understanding of the programming language specific to the user's trading platform.