Trading in the stock market can be a lucrative career or a highly disappointing endeavour that ends in forfeiture, depending on how much preparation, research, effort, and skilled decision-making you’re able to devote to trading. Unfortunately, nowadays success in the stock market equates to spending a lot of time perched in front of a computer or mobile device monitoring the latest trends, patterns, and analysis.
Handling all of that independently can be mentally exhausting and downright challenging, according to Louis Hernandez Jr, especially for someone who also has to uphold existing work, school, and/or family obligations. To accommodate busy lifestyles and still make an attempt to enter into the stock market, many investors are getting into auto trading – the practice of trading in the stock market or foreign exchange (forex) market using automated tools to choose and execute trades.
Although it might seem as though automating stock market trades could result in financial disaster, in actuality, modern robots are very effective at stopping and minimising losses while also maintaining a decent track record of choosing profitable trades. With that said, here are four of the most popular kinds of autotrading tools and resources used by professional traders:
1. Binary Options Robots
Trading binary options is an easy process to automate, but don’t expect a 100% success rate from binary robots. If there were a binary robot that could make the right trading decision every single time, hypothetically it would eventually amass all of the money in the entire market and global economy. Of course, that wouldn’t be fair and at that point it wouldn’t be using a tool, it would be cheating. If such a robot were to exist, it would probably be disabled, made illegal, or completely hidden from the general public.
Most traders just use binary robots as accessories and auxiliary tools to bolster their trading efforts while focusing on other tasks that can’t be automated, but then there are the full-on auto traders that like to make sure everything is hands off. The majority of people who use these robots still spend a good amount of time checking in on results and interjecting with their own trading decisions as necessary, so it’s not a complete commitment to full automation – more like a tool to help speed up and micromanage the process while you’re doing other things.
2. Expert Predictions, Forecasts, and Recommendations
While auto trading typically involves letting the machines make most of the decisions for you, many traders also provide their own input and make trades independent of their software. Most traders don’t pay too much attention to predictions about the stock market crashing other sensationalist doomsday-like warnings, focusing instead on company stock values and other relevant trends. Even high-level traders often have mentors and analysts that they look up to and heed the advice of.
Someone who is fully auto trading should still pay attention to the market that they’re trading in, as there are many times when human discretion can spot a beneficial trade that a trading bot would overlook. Most bots are based on algorithms, but some also take input signals from professional traders to make decisions that are in line with those of successful traders. Overall, any trader who wants to become more knowledgeable about their craft should be following the moves and recommendations of more advanced traders or at least staying up-to-date on trading news and industry publications.
3. Market Analysis Sources
Every trader has a favourite platform that they use to analyse the market with charts, graphs, and other statistical data. These are tools stock junkies literally couldn’t do without, as it wold be akin to fighting blind. Most auto traders will set up screenshot apps to take automated screenshots of data on a timed basis – that way they can look back at market data in retrospect instead of losing it to the newly updated versions.
Retrospective and predictive analysis are keys to learning how to choose better trades on a consistent basis, which is why every auto trader should build a bookmarks folder in their browser for easy access to the main market analysis sites. Such platforms are go-to resources for even the most experienced traders, regardless of whether they’re partially or fully automating their trading practices.
4. Stock Market Software
Some auto traders prefer to be equipped with a desktop software that handles charting, sorting, and in-depth technical analysis. Most of these programs are more capable than the average analysis website and there are more custom parameters that can be adjusted to produce the exact data a trader is looking for. Since many auto trading bots can be tweaked to favour certain kinds of trades, it helps for auto traders to have access to the most accurate and comprehensive data, since that’s the information they’ll be basing their bot settings and manual trades on.
Software like TC2000 have become industry staples for skilled traders who need a robust analytical tool set in a native computing environment. Although there are literally dozens of other choices available, most auto traders tend to stick to a few main tools rather than trying to collect more tools when they haven’t yet mastered the first platform. Becoming a proficient user of stock market software is a prerequisite for becoming a successful trader, particularly if you want to operate from a data-based standpoint, which is always the best approach when performance and results are the motivating factors.
Building an Arsenal of Automation Tools
The stock and foreign exchange markets are so vast that it really is a numbers game. Conducting a high volume of trades on a daily basis is the most guaranteed way to break into higher daily profits, and in order to accommodate such a large number of transactions you’ll undoubtedly need to streamline and automate things as much as possible. Having a well-rounded arsenal of tools is a preliminary step that the majority of auto traders try to handle before embarking on a full-blown effort to automate and expedite their trading processes.