Pros and cons of automatic trading

Imagine being able to ride the wave of the financial markets, day and night, without having to constantly keep your eyes from the screen, without having to deal with gestione dell'emotività, always lurking at every trade and above all without feeling fatigue. Welcome to the world of automated trading. Immersing yourself in the world of EAs means having these and other benefits, but let’s proceed slowly. What does algorithmic trading mean? While it is in practice close to automatic trading , it has a slightly different meaning. Algorithmic trading is literally trading that responds to very specific rules, algorithms in fact, which it cannot violate. It therefore leaves little room for discretion and human error. Therefore, it is not necessarily the case that if I am doing algorithmic trading, it is also automatic. If I were in full control of my emotions and never felt fatigue, which is often the cause of mistakes, I could apply algorithmic trading without taking advantage of software that automates the process. However, not being machines, once we set rules we want someone to enforce them for us without having to spend 24 hours in the markets. Here is where automatic trading comes to our aid, that is, the delegation of our trading to software. Let’s be clear, the rules must be described precisely, unambiguously and understandable to the machine.

The advantages

Indeed, an automated bot needs you to be clear in coding the rules, so that it can always obey them unambiguously. This is one of the reasons why it is interesting to codify one’s strategy, which perhaps up to now we have applied in a discretionary way and instead want to make it more methodical and controlled. In fact, automatic trading also allows for greater control over performance since we have statistics that prove invaluable in order to monitor how our strategy is progressing, whether we need to make adjustments or change it. Dell’EA possiamo fidarci poiché non risente della stanchezza e non ci darebbe mai informazioni errate. Potremmo controllare i drawdown, i margini di guadagno, i momenti di criticità e tanti altri parametri che difficilmente potremmo avere sempre sotto il nostro sguardo con il trading discrezionale.

Disadvantages

Using EAs still requires passion for this type of trading, and while we do not have to be programmers or mathematicians we need to have a minimal penchant for data and numbers. If you have a discretionary strategy that has produced interesting results so far but you would like to automate it because you maybe you want to see how it would have performed in the past, it is a good idea to program your strategy or, if you are not a programmer, have an expert develop it. The MQL language is a metalanguage for the MetaTrader platform created by traders for traders, meaning that it is much simpler and aimed at trading than any other programming language. However, if you do not want to try your hand at learning a programming language, you can always look for someone to develop the bot on your ideas. That way you will work with a developer (who by the way you can easily find on the official MQL website) to code your strategy. Be careful though: you will be the one giving the details of your system so you need to have your strategy clearly in mind. The developer will simply translate it from human language to MQL. If your strategy is not too complicated , you can even look for online platforms that support non programmers to code their strategies in MQL without having to write a single line of code . This can be very helpful to those who want to approach algorithmic trading with a own strategy but it is clear that it cannot be used for complex strategies.

The solution

Investetica ‘s automated software is tested over 10 years of history and proven in live trading with excellent results. If you want a starting point in algorithmic trading that already brings you gains Investetica is the ideal choice, as it provides you with a package of already created and performing software. Still not convinced? Contact us now and we will clear up all your doubts.