Many people are lured to the stock market daily by promises of easy money via automated trading system or expert advisors. An auto trading software is a automated trading program that runs on your computer and trades for you in your account. Selling robots and such software online has become a huge business, but before you take you plunge there are things to consider.
There are certainly some benefits to auto trading stocks, but there are also some drawbacks. The thing to keep in mind is that rarely is making a truck load of money easy. The promise of easy money is the oldest trading scam in the book. There is money to be made with trading software and learning to automate strategies. Unfortunately, to do this effectively could actually take longer than simply learning how to trade manually, since a person needs to learn how to trade first, and then still learn how to automate the strategies via a programming language. And buying a program comes with loads of pitfalls.
Beware of the Sales Push
While a few software will work, and produce good returns, most will not. Less than 5 percent of people who attempt trading are successful at it, and that includes people who create and buy software. The odds of success are still very small even when using a trading robot.
The people who are successful with auto trading software constantly watch how their system is performing, make adjustments as market conditions change and intervene when uncommon events occur (random events can occur that affect the programming in unexpected ways). Successful robotic traders, just like successful manual traders, put in the work required to create and maintain profitability. This is quite different from software sold online that describe a life of easy money and no work.
Rarely Is Automated FULLY Automated
As explained to above, successful auto traders put in a lot of work to creating and maintaining their programs. The real work is maintaining the program. Someone cannot simply flick a switch and watch the money role in while doing nothing.This may work for a time, but market conditions change and unexpected events occur, which require intervention on the part of the trader.
If a person buys an auto trading software, it is unlikely they will have the expertise to know when to intervene and when not to. Intervening, when not required, could turn a winning strategy into a losing one, just as not intervening when required could drain the trading account in a hurry.
Automated trade is rarely auto-pilot trading. It takes a lot of knowledge to be able to maintain a software, and trading skills/psychological skills are still required to intervene when necessary, but not too much.
Final Word on Auto trading stocks
Auto trading stocks can be a beneficial and profitable skill to have, but typically this skill can’t be purchased for a few dollars on the internet. Automated trading takes a lot of work and skill. To effectively create and maintain software, a trader needs both trading and programming knowledge. Robotic trading also requires time. It is not something to set and forget. It needs to be routinely checked and manual intervention may be required when random events occur or market conditions change.