What Makes Automated Trading Better Than Discretionary Trading?

In Futures Trading, Stock Trading by Delta Admin

Stock and futures trading were some of the first industries to start using computers and internet connections, and modern traders continue to demand and develop some of the most advanced software in the world.  Speed is key for any trade, even if you avoid day trading, because an important news story or announcement can have an instant impact on industry and company values.  Because of this, today’s traders will typically rely on automated trading rather than a discretionary trade system that only responds to manual trade inputs.   Here’s why:

Automated Trading Expands Your Reach

Keeping track of different markets, companies, and industries takes time, and when you spend time on one market you have less time to spend monitoring other markets for news stories and new innovations.  At the same time, you don’t want to spread yourself too thin and miss a risk or an opportunity because you were too busy with something else.  Fortunately, an automated trading system can free up your time in several ways.

  • Trading in other countries happens in the evening or overnight thanks to time zone differences, but automated trading software can monitor their markets and make overnight trades while you get some needed sleep.
  • It can be hard to approach the same market with different strategies, but you can set up trading software to run several plans at once even if they conflict.
  • Automated systems can monitor situations in several markets and create information summaries for you.  Not only that, it can also act on its own based on the parameters you set for it.

Keep Your Trading Consistent

Starting out with a plan is essential for any kind of trader, but when things start to happen all at once that plan often goes out the window.  Our decisions always take a turn for the worse when we let our emotions run away with us, but automated trading software doesn’t have that problem.   By setting up your plan with the algorithmic systems your software uses, you can trust that your trading will do what you intended no matter how heated the floor gets or how crazy the news gets.

Trade At The Speed Of Light

Automated software’s number one contribution to trading is the fact that it responds to changes much faster than a human possibly could.  This fact is incredibly important because other traders are also using automated trading software and the market software is updating values instantly based on their input.  In other words, if you manually buy and sell based on the values you see, they could change by the time you place your order.  Automated trading lets you keep up with prices based on the parameters you set.

While discretionary trading is still an available option, professional traders have switched to automated software for a variety of good reasons.  It can stay alert all the time and monitor more markets than you could alone.  It sticks to the plan you set no matter what’s going on.  Most importantly of all, it trades within microseconds of noticing a change, giving you consistent results that keep up with the competition.