What Do You Think Is Automated Trading Risk-Free

[fxfarmerashik]

We all are now living in an era of technology. Technology has contributed to almost every sector. Due to technology now online trading has been gaining popularity day by day. And now we have robots instead of a human to participate in online trading.

So many traders have a confusion that is automated trading safe or not. Frankly speaking from my perspective there are risks in automated trading. If you want to use trading software then you have to take some risks in order to profit from it. Because everything has pros and con.

So first of all what is an automated trading software

Automated trading is a sophisticated trading platform that uses computer algorithms to monitor markets under certain conditions.
A trader using an automated platform may set some initial rules for equities, such as volatile small-cap equities whose prices have recently exceeded their 50-day moving average.

Traders also define the entry and exit points for their potential positions, and then let the computers take over. Automated software can select actions that meet the criteria and execute transactions based on preset parameters.

Some of the advantages of automated trading are obvious. Humans are limited in the number of stocks or currencies they can watch at any given time. We only have two eyes, right?

On the other hand, computers can navigate different markets and values with incomprehensible speed for real-life retailers. Algorithms can detect a trend reversal and execute a new transaction in a fraction of a second.

Automated strategies only work in specific market conditions. They are not universal and you need to know when to deploy them.
In addition, many automated strategies become over-optimized and do not take into account actual market conditions. Remember that not all backtests in the world can make a foolproof strategy.

Benefits of automated trading

• Fast Trade Execution
• Adheres to a predetermined strategy and does not deviate
• Eliminate stress and emotions
• Reduced transaction costs
• Risks of automated trading
• Lack of control is difficult to accept for some traders
• Successful strategies in backtests can falter in real life
• Easy to over-optimize your strategy
• Many robots or expert advisors have questionable success rates

So, as you see there are both benefits and some risks in automated trading. Therefore, if you want to succeed in automated trading then you have to take certain risks.