Vocabulary: What is Automated Trading?

Dec 3, 15 • StockexchangeNo CommentsRead More »

Binary options traders are definitely being pampered. With the many innovative features that online brokers offer today, this trading instrument has gone a long way since its early days. Gone are the crude aspects of trading that make every session an arduous process. Instead, taking its place is one feature that none of most investors could resist- automated trading.
An automated binary trading operates as an arrangement between three parties: a binary options broker setting up an arrangement with an advisor to give recommendations to binary traders about their trading accounts.

Going a step beyond its services, this sophisticated support uses signals that are automatically copied and executed as a trade on behalf of the investor. The automated trading binary options involve a three-tiered logical flow:

Data receiving tier- information from external sources are collected
Decision-making tier- a strategy is determined based on information received
Execution tier- a trade is executed based on information and strategy employed

The automated trading system allows new binary options traders to make profit without the need to master the task of reading charts and graphs correctly. The most basic concepts about the trading process would suffice.

How Can “Automated Trading” Work For You?

Automated trading presents powerful benefits to traders. Overall, risks are significantly reduced as traders avoid ill-informed binary trades. Investors can subscribe to various selling or buying systems that suggests multiple indicators and associated timeframes. As a result, there is no need to manually toggle between reading charts and interpreting trends. Without the added stress, you can focus solely on your trades and make better trading decisions.
With the use of various trading strategies, investors can perform different trades at the same time without constantly monitoring the market. The automated system would not require your presence when major economic news breaks out as you can rely on market advice provided by automated trading.
Returns are optimized as you can benefit from quick trades as well. Investors can receive signals and respond to market changes in a timely manner. When multiple trades are involved, you can also multiply the profits you gain.
What Type of Traders Will Make the Most From ‘Automated Trading’?

Individuals who have a busy schedule can greatly benefit from an automated system of trading. Those who cannot be physically present all the time can use an auto trader to open a Call or Put position, and be confident that it will be carried out. Day workers, who consider binary options as a secondary source of income, can trade the markets in an automated fashion while the user attends to some other business.

Novice traders can also learn a great deal as he moves forward with his automated trading. Often times, automated systems are complemented with materials explaining different concepts far along the trading session: market variables, an explanation why a certain position has been opened, which trading signal was used, etc. It does not only a different trading experience but also serves as a learning process for beginners.

Tips

Let’s take a look at some tips on automated trading:

Active trading. If you are an active investor in the options market, automated binary trading can take the role of manually executing a trade. You can as easily manage a trading schedule when it is most convenient for you.
Choose the correct platform. You might want to choose a broker with the necessary tools that can implement an automated trading system.
Evaluate own skill set and trading experience. Investors who are not confident that they have enough experience can forego relying on their own capacity to go over charts and recent market trends. These are roles that can be easily assumed by automated binary trading.