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The Main advantages and disadvantages of Automated Trading

Every trader at least once in his life thought about an automatic system for performing operations. To use such a tool, you need to learn as much as possible about it. Someone is afraid of ignorance, someone is afraid of the price, and someone does not believe in this system. In this article, we will take a closer look at an automated trading system.

What is automatic trading?

Let’s start with the fact that automatic trading is the use of various tools and programs in the market, which are often called robots or advisers. With their help, you can fully automate the process and increase the efficiency of trading.

Such a tool is ideal for those who, in addition to trading, are engaged in their main work and do not have much time to watch the market. The software takes care of everything and completes all trades automatically. In addition, you yourself adjust the tool to your strategies and wishes. You can even have the system ask for confirmation before every trade. Thus, you will definitely be aware of when and what transactions the robot makes.

Many are interested in the question, how to build  automated trading system. This can be done with the help of professionals who are well versed in this. In addition, you can use ready-made systems.

The Main advantages and disadvantages of Automated Trading

Main advantages and disadvantages

It would seem that such a program is an ideal assistant in the market. Despite this, it has its drawbacks. The use of automated trading systems has a number of advantages and disadvantages.


  • The computer system is able to track large amounts of market data faster than the human brain, allowing you to quickly analyze and respond to changing market trends.
  • Automated trading systems can be programmed with rules or algorithms that will execute trades according to your strategy without the intervention of emotion or intuition. This means that you are less likely to overreact when the markets become volatile and make decisions based on fear or greed.
  • Since your trading strategy is always executed by computers, there is less risk in order execution because you never have to manually place orders during times of high stress. You can also customize your strategies to limit the amount of capital they can use to control portfolio risk.


  • One of the biggest disadvantages of automated trading is that computers are not always able to react quickly enough to changing market conditions. In some cases, computer models may need to be updated or adjusted due to changing trends and patterns.
  • In addition, it is important for traders to remember that computers do not have the human intuition and experience to make informed investment decisions in certain markets. This means that there is a higher risk of unexpected losses if traders rely too heavily on automated trading methods.
  • It is important to be aware of real-time market data and update your trading strategies to maximize your chances of success.
  • Another disadvantage of automated trading is that computers cannot make correct decisions based on human emotions or situational factors, so traders may be more prone to losses when using such trading systems. However, it is possible to add a human factor by using a computer program that can analyze market data and alert traders before they make certain trades. This allows people to control their strategies, but not be solely responsible for making investment decisions.
  • While automated trading systems offer many advantages over traditional manual trading, it is important that all traders, both novice and experienced, understand the pros and cons before adopting an automated strategy.

Before applying such a system, you need to weigh the pros and cons, and then make a final decision. If you responsibly approach the choice of such a robot, then you can avoid all the shortcomings.

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