Are you tired of entering and executing all your trades manually? If so, you’re probably like many others who consider using an automated system. But what exactly are auto trade systems, and how effective are they? Do they really deliver on all the advertising hype, or are they just a passing fad? All those questions should be on your mind if you are considering an automated trading system.

Keep in mind that you can purchase a stand-alone piece of software or simply use your broker’s built-in program as an automated feature. There are plenty of ways to set up and operate your daily trading activity when you decide to automate. Here are the most important things to know before saying goodbye to your manual method.

Auto Trading Programs Can Do a Lot

Robots, auto traders, and expert advisors are terms that are used interchangeably in the world of securities activity. Most online brokers offer the service to new and existing clients. If you are new to the idea of automation, consider using a demo account and practicing how to set up rule-based trading for at least two weeks. That’s because using automated trading platforms takes time, especially if you’re accustomed to doing everything manually. However, once you get the hang of working with a rules-based robotic setup, you’ll be surprised at how simple it is to enter orders, set stops, and exit positions based on specific rules that you set.

Nothing is Perfect

Taking into consideration all the technical factors, no form of automation is perfect, whether in the world of securities, manufacturing, or banking. Machines make errors, break down, and otherwise malfunction in all sorts of ways. Stock software is not immune to mechanical failure. That’s why it’s imperative for users to monitor daily activity. Of course, it is possible to let a robot continue operating while you sleep. But most day traders and others prefer to keep an eye on the automated experts to make sure everything is running smoothly. If there’s a glitch or something obviously stops working correctly, then you always have the chance to intervene and do the work manually.

Your Options with Auto Trading

For individuals who operate from a home computer and attempt to earn a profit on their own accounts, there are plenty of excellent options with auto trading programs. The most significant one is the ability to decide on specific conditions that will trigger a buy order. For instance, you might decide to set a rule that every time a particular stock’s price rises above its 50-day moving average and has a volume of more than 50,000 shares within the last 10 minutes, a buy order should be entered. That’s just one example of many that you might choose. The point is that no matter what kind of technical indicators or mathematical parameters you select, the program will do the work of identifying the conditions and entering the order.

Manual Systems are Time Consuming

One of the biggest drawbacks of manual order entry is time lag. Human brains and fingers just can’t compete with the speed and accuracy of computers, no matter how hard we try. Perhaps the single most important advantage that robots and expert advisors have is their lightning speed. Once order parameters are met, and a buy signal is triggered, the order is placed on an automated platform in a matter of fractions of a second. This benefit is especially vital for day traders. Those who need to identify and execute multiple orders per day need a rapid-fire setup that lets them get into a position as quickly as possible.

Auto Trade Means No More Emotional Errors

One of the main selling points of auto trade programs is their ability to remove nearly all human emotion from the buying and selling of securities. You must control your emotions when trading stocks and far too many people let their fear, greed, exuberance, joy, and paranoia control their selection of stocks, forex pairs, commodities, and other assets. Likewise, it’s all too easy, while using a manual approach, to allow human emotions to steer the ship. With auto trade, once the parameters are set, there’s no way that emotion can take over.

Keep in mind that when a trade begins to go south, you might be tempted to override the robot and get out to avoid a loss. That is one of the downsides of automation. Even though it has the potential to eliminate the emotional component of buying and selling, human beings can and do interfere and try to take back control at various times. If you do employ an expert advisors or auto trader type of software, let it do its job after you set the rules. Otherwise, you risk defeating the system’s non-emotional approach to trading.