HOW AUTOMATED TRADING WORKS
Automatic trading works in a simple and systematic manner that is completely based on the commands/instructions/param eters set by the trader. Let us see how the automated trading system works stepwise:
For the automated trading system to work, first of all, the trader will need a platform where you will set the parameters of your trading strategy.
Then, on the basis of trading experience, the trader will create entry/exit positions which will be done via an instructed input.
These rules and conditions will be based on the time of the trade, the price at which the entry and exit positions will take place and the quantity of trade.
These algorithms will place the trade on the behalf of the trader every time the conditions are met.
For instance, the automatic stock trading system can be instructed with the help of algorithms to buy 200 Apple shares when its 100-day moving average goes above the 250 day average.
The automated trading system will constantly keep monitoring the financial market prices, trades etc. and will execute the trade whenever the predetermined instructions/parameters are met.
