Some of the advantages of automated trading have already been discussed, but let's take a closer look: • The robot relieves a person of some psychological stress in trading; • Robot reacts faster than human. When a trading signal appears (to enter or exit), the electronic adviser does not hesitate. People, on the other hand, may hesitate or question the deal. The lightning-fast reaction time of the robot brings benefits in rapidly changing market conditions. • Automated software can control many more markets than a human. Accordingly, the robot can use much more data and trading opportunities than a human. • The robot forces the trader to simplify the strategy to the level at which it lends itself to programming.
This process gives traders an in-depth look at their strategy. People who buy software don't get these benefits and often don't know what's under the hood. • Automated trading is the surest test of whether a strategy is viable or not. Trading manually has too many variables, while the program just does what it is supposed to do. Automation and testing is a good way to test if a strategy is viable in the current market conditions. Once a strategy is automated, it can be easily tested under various market conditions (using current or historical price data). This will reveal the strengths and weaknesses of the program.
For example, a robot may perform well in trending markets but poorly in volatile markets. Cons of trading robots Some of the disadvantages of automated trading have already been discussed, but let's look at a few more: • A lot of work still needs to be done to build and maintain the program. • Sometimes manual intervention is required. This means that robot trading is not fully automated. For example, if volatility increases much more than usual, then the position size may require manual adjustments. • It is unlikely that buying a trading robot without further upgrades will give positive long-term results. The algorithm may work for a certain period of time, but ultimately the software needs support.
If these shortcomings are critical for you, then it is better for you to use an investment service - trust capital management. Summary Trading robots can control many more markets to find opportunities than humans. Therefore, they can react faster when trading signals appear. Do not get carried away buying robots that promise easy money. It is better to spend the time and money learning how to trade and then gain some programming skills if you want to automate your strategies. .