Close Menu
TechCentralTechCentral

    Subscribe to the newsletter

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    Facebook X (Twitter) YouTube LinkedIn
    WhatsApp Facebook X (Twitter) LinkedIn YouTube
    TechCentralTechCentral
    • News

      MultiChoice is working on a wholesale overhaul of DStv

      10 July 2025

      Spam call epidemic: operators say their hands are tied

      10 July 2025

      Britehouse unit breaks free from NTT Data

      10 July 2025

      Samsung’s bet on folding phones faces major test

      10 July 2025

      OpenAI to launch web browser in direct challenge to Google Chrome

      10 July 2025
    • World

      Grok 4 arrives with bold claims and fresh controversy

      10 July 2025

      Bitcoin pushes higher into record territory

      10 July 2025

      Cupertino vs Brussels: Apple challenges Big Tech crackdown

      7 July 2025

      Grammarly acquires e-mail start-up Superhuman

      1 July 2025

      Apple considers ditching its own AI in Siri overhaul

      1 July 2025
    • In-depth

      Siemens is battling Big Tech for AI supremacy in factories

      24 June 2025

      The algorithm will sing now: why musicians should be worried about AI

      20 June 2025

      Meta bets $72-billion on AI – and investors love it

      17 June 2025

      MultiChoice may unbundle SuperSport from DStv

      12 June 2025

      Grok promised bias-free chat. Then came the edits

      2 June 2025
    • TCS

      TCS | Connecting Saffas – Renier Lombard on The Lekker Network

      7 July 2025

      TechCentral Nexus S0E4: Takealot’s big Post Office jobs plan

      4 July 2025

      TCS | Tech, townships and tenacity: Spar’s plan to win with Spar2U

      3 July 2025

      TCS+ | First Distribution on the latest and greatest cloud technologies

      27 June 2025

      TCS+ | First Distribution on data governance in hybrid cloud environments

      27 June 2025
    • Opinion

      In defence of equity alternatives for BEE

      30 June 2025

      E-commerce in ICT distribution: enabler or disruptor?

      30 June 2025

      South Africa pioneered drone laws a decade ago – now it must catch up

      17 June 2025

      AI and the future of ICT distribution

      16 June 2025

      Singapore soared – why can’t we? Lessons South Africa refuses to learn

      13 June 2025
    • Company Hubs
      • Africa Data Centres
      • AfriGIS
      • Altron Digital Business
      • Altron Document Solutions
      • Altron Group
      • Arctic Wolf
      • AvertITD
      • Braintree
      • CallMiner
      • CambriLearn
      • CYBER1 Solutions
      • Digicloud Africa
      • Digimune
      • Domains.co.za
      • ESET
      • Euphoria Telecom
      • Incredible Business
      • iONLINE
      • Iris Network Systems
      • LSD Open
      • NEC XON
      • Network Platforms
      • Next DLP
      • Ovations
      • Paracon
      • Paratus
      • Q-KON
      • SevenC
      • SkyWire
      • Solid8 Technologies
      • Telit Cinterion
      • Tenable
      • Vertiv
      • Videri Digital
      • Wipro
      • Workday
    • Sections
      • AI and machine learning
      • Banking
      • Broadcasting and Media
      • Cloud services
      • Contact centres and CX
      • Cryptocurrencies
      • Education and skills
      • Electronics and hardware
      • Energy and sustainability
      • Enterprise software
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Lifestyle
      • Motoring
      • Public sector
      • Retail and e-commerce
      • Science
      • SMEs and start-ups
      • Social media
      • Talent and leadership
      • Telecoms
    • Events
    • Advertise
    TechCentralTechCentral
    Home » Company News » Is automated trading right for you?

    Is automated trading right for you?

    By AvaTrade30 March 2022
    Twitter LinkedIn Facebook WhatsApp Email Telegram Copy Link
    News Alerts
    WhatsApp

    Unless you’ve shielded yourself from all news sources for the past five years, you have heard of automated trading. There are numerous variations of the practice, but most focus on a set of algorithms that give investors the power to set all their buying and selling activity to autopilot. The automated trading robot can precisely and almost flawlessly carry out your particular trading rules, make purchases, hold positions, set stops, and get out of a trade based on a simple or highly complex set of instructions. Of all securities transactions on major exchanges in the US, UK and Japan, for example, about 80% are initiated by automated trading systems.

    Keep in mind that most of that activity is institution and government-based, but individuals are becoming more involved in auto-trading. Most reputable brokers now offer automated trading as a standard part of their online services for all account holders.

    But how can you determine whether this style of buying and selling is right for you?

    First, it’s essential to know exactly what automated trading is. Then, individuals must assess and weigh the multiple pros and cons of the method. After that, take time to understand how to build a DIY auto-trading system. Finally, don’t forget to understand basic market dynamics that play a central role in automated trading and review the most common myths.

    What is it?

    Automated trading uses a set of algorithms, based on human-created rules, to do all the standard actions that are usually performed by customers of an online brokerage firm. If you’ve ever wondered what is automated trading then you are already curious about the potential benefits that this new technique holds. Keep in mind that there are many variations on the theme, with some brokers and merchants offering systems that range from simple to quite complex.

    Advantages

    There are numerous advantages for people who prefer to automate at least a portion of their trading activity. One is convenience. There’s no need to constantly watch the screen, monitor trades, set stops and follow everyday price action. The program does all that for you. Likewise, one of the major benefits of any kind of automation is that emotion, for the most part, is removed from the day-to-day decision-making process. It’s a well-known fact that many inexperienced investors get in major trouble when they let their emotional state overrule logic and discipline.

    DIY systems

    If you like the idea of tinkering around with technical code and assembling your own automated trading-like programs, the process is not all that complicated. There are some brokerage firms that offer tutorials for beginners who want to learn to construct their own lines of commands and build, from the ground up, a fully automated program that includes numerous commands and special instructions. It’s good to remember that market dynamics can sometimes affect the performance of any automated trading program. When major trends shift, the instructions within the program’s code might not recognise the situation for what it is. That’s just one reason to do periodic checks and make sure the entire automated trading system is operating as you desire.

    Disadvantages

    Nothing is perfect. When people assume that an auto-trade setup will make decisions for them, they get into major trouble. One of the primary disadvantages of automated programs is that they often break down and need to be adjusted. Likewise, even when they perform exactly as you want them to, they’re not good at adapting to changing trends and market conditions. Even the best algorithmic system is nothing more than a sophisticated machine. Machines occasionally malfunction, break down and fail to take special circumstances into account. A good example is self-driving cars. One of the main problems engineers encounter is unexpected on-road conditions and glitches in original programs. The same problems can arise with automated trading, which is why it’s critical to check on them regularly.

    Myths

    Like every new form of technology, automated securities programs are the victim of several widespread myths. Here are a couple, along with the explanation in each case.

    • Auto-traders can get rich fast: Automated trading offers many advantages to those who use it correctly, including a hands-off way of taking part in the securities markets. But no technique yet known can deliver on a promise like fast wealth.
    • Auto-trade technology will eventually replace human placed trades: It’s doubtful that any computerised approach will ever take the place of human decision-making. Automated trading can and does perform dozens of routine tasks, but they only operate according to human instructions. Even some of the most sophisticated institutional versions still require human programmers to create and maintain them on a regular basis.

    This promoted content was paid for by the party concerned



    Avatrade
    Subscribe to TechCentral Subscribe to TechCentral
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email Copy Link
    Previous ArticleMinister ‘elated’ by digital TV court judgment
    Next Article People want their books back – can you keep up?
    Add A Comment

    Comments are closed.

    Company News

    AI in project management: a new era of efficiency and transformation

    10 July 2025

    Samsung unfolds the future with thinnest, lightest Galaxy Z Fold yet

    9 July 2025

    Huawei supercharges South African SMEs with over 20 new eKit products

    9 July 2025
    Opinion

    In defence of equity alternatives for BEE

    30 June 2025

    E-commerce in ICT distribution: enabler or disruptor?

    30 June 2025

    South Africa pioneered drone laws a decade ago – now it must catch up

    17 June 2025

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2025 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.