Automated trading entails the trading practice whereby the traders’ entry and exit (into and from trading accounts) and money management rules are actually monitored by the computer. Alternately known as mechanical or algorithmic trading, automated trading enables traders to “program” their entry and exit with the help of a set of definite rules. And once the entry and exit are programmed, they can automatically be monitored by the computer. There are not one but several reasons why automated trading is preferred by investors today. One of the foremost benefits of this platform is that it takes a part of the emotions out of trading. And, that really helps. After all, who doesn’t know that excesses of emotions (be it positive or negative) serve as one of the major factors affecting the traders’ prudence adversely?
Auto trading: How it works
The automated trading system requires software which is connected to the direct access broker. The preset rules must be written in the proprietary language of the platform. Once you establish the rules, the computer will start tracking the markets to identify buying or selling opportunities based on the rules themselves. The orders for trailing stop, stop losses and profit targets are automatically generated.
As already mentioned above, automatic trading is preferred by clients owing to the fact that it keeps out the emotion in most cases. By driving out the emotions to a large extent, automatic trading helps to preserve discipline in the volatile market.
Learning about metatrader 5 automated trading and more
The discussion regarding automated trading remains incomplete if we don’t talk about MT 5 or Metatrader 5 – one of the most preferred auto trading platforms in the market. It has been developed by one of the most well-known names in trading – MetaQuotes. The MetaQuotes Software Corporation has been involved in developing trading software for various financial markets including equities, CFDs, foreign currency and futures etc for several years now. Their creations- be it Metatrader 3, 4 or 5 have all emerged as market leaders within just a few days of their introduction. It was in the year 2005 that Metatrader 4 had been introduced. Metatrader 4 had gained traction in the market – particularly owing to the fact that it provided traders with an innovative tool which aided them to create their own programs. And, this was what had given rise to algorithmic or automated trading. MT4 was notably backed by features that enabled clients to test and maximize the effectiveness of their trading strategy.
The metatrader 5 automated trading was an obvious improvement from its predecessors (MT 3 and MT 4). MT5 had primarily been created so that clients could make the most of the advantages of all the Metatrader platforms across all the financial markets.
If you’re trading with Meta Trader 5 then you will be allowed to access all the required tools meant to indicate fluctuations in market prices as well as to facilitate market analysis.
Make sure you’re educating yourself more about auto trading with MT5 before you start trading.